Latest News

Italy power expenses stay sky high despite clean energy push: Maguire

Electricity prices in Italy are the greatest amongst significant European economies, due to an enduring reliance on fossil fuels for power generation despite growth in renewable energy output.

Italy's wholesale electrical energy costs have balanced around 100 euros per megawatt hour (MWh) up until now in 2024, according to energy think tank Ash.

That compares to 69 euros in Germany and 50 euros in Spain, and means that Italy's homes and services pay far bigger energy costs than most of their peers across Europe.

FOSSIL REPAIR

High reliance on nonrenewable fuel sources for electricity generation is the main chauffeur behind Italy's high power expenses. In 2023, 55%. of Italy's electrical power came from fossil fuels, Coal data shows.

That compared to 45% in Germany, 39% in the UK,. 25% in Spain and 41% for Europe as a whole.

So far in 2024, Italy's power companies have handled to raise. clean power generation to a brand-new record, and have cut the share. of nonrenewable fuel sources in electrical power generation listed below 50% for the. very first time, to 47%.

However, that fossil generation share still surpasses that of. competing economies, with Europe as a whole tape-recording a 37% average. fossil share this year and Germany a 40% share.

HIGH AND RISING

Italy's nonrenewable fuel source generation share is expected to increase. over the rest of the year as clean power generation. declines.

The lift in Italy's tidy power output so far in 2024 has. been mainly sustained by a 45% rise in output from hydro dams and. a 18% rise in solar generation.

In addition to a 2% rise in wind output, the greater hydro and. solar production helped lift total clean electricity generation. by 20% from January through August from the very same months in 2023.

In total, Italy's tidy electrical power generation struck a record. 88 terawatt hours (TWh) throughout the January to August duration,. compared to 73.4 TWh during the same months in 2023.

Nevertheless, both hydro and solar generation peak throughout summer season. in Italy, and then trend steadily lower over the rest of. the year as snow melt levels drop off and reduced daytime cuts. into solar output.

That suggests that overall tidy power generation will also. decrease, and will likely spur a revival in fossil fuel-fired. output as we head into winter season and the country's main heating. season.

GAS RATE PRESSURE

Italy's power firms primarily count on natural gas for power. generation, with around 45% of electrical energy generation coming. from gas-fired plants in 2023.

On the other hand, Germany's power producers just depend on. gas to produce around 15% of electrical power in 2015,. while the average for Europe as a whole was 24%.

What's more, more than 95% of Italy's gas originates from imports. due to progressively decreasing domestic gas production.

Such a high dependence on imported gas implies that Italy's. power companies have actually been at the mercy of international gas markets. for the lion's share of their power generation fuels.

In addition, Italy's federal government has opted to change gas. materials from Russia - which was sanctioned by European Union. member states following its intrusion of Ukraine in 2022 - with. purchases from other suppliers.

This switch-out of gas from Russia - which was previously. Italy's single largest gas supplier - with gas from other. providers has actually strained gas market streams throughout Europe, and. raised total gas rates.

In addition, Italy has plugged a growing share of its gas. supply space with imports of melted gas (LNG), which is. considerably more pricey than gas supplied through pipeline.

HANDED DOWN EXPENSES

Much of the higher expenses of gas imports have actually been passed on. to Italy's customers in the type of the greater wholesale. electrical power expenses.

Italy's government has attempted to soften the blow of greater. energy rates by reducing sales taxes and supplying aids. for the build-out of renewable resource generation capacity.

But with utilities on the hook for aggressive boosts in. renewable energy capacity as part of a new energy security. decree passed last year, households have borne the brunt of the. effect from the greater cost of energy imports.

And with power providers set to deal with steep capital costs as. they construct new clean energy production possessions, energies are. not in any position to cut costs for families whenever quickly.

That means that Italy's energy customers look set to keep. paying among the greatest rates in Europe for their power and. electrical power for the foreseeable future.

<< The opinions revealed here are those of the author, a. writer .>

(source: Reuters)