Renewables forecast to reduce Italian power imports

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4 July 2013, Gas, Electricity, Nuclear, Solar, Wind

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At present, Italy's generation mix is dominated by gas- and coal-fired generation, which together contribute 167TWh or 61% of the mix in 2013. This dominance will continue, albeit falling going forward. In 2030 Datamonitor forecasts that just over 53% of the mix will come from gas and coal.

The main reason behind this predicted change is an assumption of less gas generation due to unattractive spark spreads. Although Datamonitor has assumed the conversion of 3GW of oil-fired capacity to coal-fired plants by 2020, there will still be a greater role for renewables. There will also be a reduced dependence on imported power, which will fall to 4% of total demand in 2030.

Renewables will increase by almost 20TWh over 2013-30 to make up 27% of the generation mix in 2030. Solar and wind generation will do most of the work, with solar expected to make up just over 10.2% of the total mix in 2030 under the assumption that investment will continue despite the removal of feed-in-tariffs for new solar since Italy's overall expense cap of EUR6.7bn was reached.

This growth assumes that solar PV costs will not change disproportionately in the long run so that grid parity will be achievable over the forecast period. It also assumes the increase in costs of solar PV panels from EU import duties on Chinese-sourced panels will not impact the investment attractiveness of solar installations. As for wind, onshore wind growth is forecast to make up the majority of the 20.5GW of installed capacity in 2030.

Italy is forecast to have flat power demand growth, with 0.8% year-on-year forecast out to 2030. Transport demand will grow the most in percentage terms assuming some success is achieved in convincing Italians to drive electric vehicles, but will still represent just 4% of overall demand. Residential and commercial demand will grow modestly, driven mostly by the uptick of GDP assumed from 2016.


www.datamonitorenergy.com / asken@datamonitor.com / @DatamonitorEN

Source: MarketLine

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