Italy's energy production
Italy's energy production is primarily based on nonrenewable sources, particularly coal, oil, and natural gas, though renewable sources such as geothermal, hydroelectric, and wind energy also contribute to the mix. The country’s energy landscape has evolved significantly since the late 19th century, when it first established coal-fed power plants. Hydroelectric power, harnessed from the Alps, played a crucial role in early industrial development, and Italy was home to the world's first geothermal electricity station built in 1904. However, after World War II, the limitations of hydroelectric power on its own became apparent, leading to the expansion of thermoelectric plants.
In the 1970s, Italy briefly pursued nuclear energy but shifted away from this path after public opposition intensified post-Chernobyl. The 1990s saw the liberalization of the electricity market, although the anticipated benefits of competition have been mixed. As of 2022, renewable energy sources accounted for approximately 31% of Italy's electricity, with a significant portion coming from solar energy. Looking ahead, Italy plans to phase out coal power entirely by the end of 2025, replacing it with gas-fired plants, while also increasing its reliance on imports from Algeria to reduce dependence on Russian gas.
Subject Terms
Italy's energy production
Official Name: Italian Republic.
Summary: In Italy, energy production is derived mostly from nonrenewable sources, such as coal, oil, and natural gas; to a lesser extent, Italy’s energy comes from renewable sources, such as geothermal, hydroelectric, and wind energy.
The first Italian power generation plants, in the late 19th century, were coal-fed plants located within the major cities. As a result, the development of the national transmission grid allowed the exploitation of the large hydroelectric reservoir constituted by the Alps, and thanks to hydroelectric power—the only cheap and national source—an initial, cautious Italian industrial development was possible.
Hydroelectric resources also gave the temporary illusion that Italy could be indefinitely self-sufficient in its energy production. In addition, in 1904, the first geothermal electricity station in the world was built, in Larderello. This source continues to make a contribution today, although in 2019 it had a capacity of just 800 megwatts (MW).
After World War II, it became clear that hydroelectric resources could no longer keep pace with the heavy requirements of industrialization. Italy had little choice but to rely on new thermoelectric power plants. The hydropower potential was exploited almost to its maximum until the 1950s; then, partly because of huge environmental disasters (such as the destruction of the Vajont Dam during a 1963 landslide), the construction of new power plants of this type was completely abandoned.
Since the beginning of its history, energy production in Italy had always been entrusted to private companies (except for some partial attempts at state control during the Fascist period). On November 27, 1962, the Parliament approved the nationalization of the electricity system and the establishment of National Agency for Electric Energy (or Ente Nazionale per l’Energia Elettrica, ENEL), to which were delegated all activities of production, import and export, transport, processing, distribution, and sale of electricity produced from any source.
Historical producers such as the Piedmont Hydroelectric Company, Edison, and EMS were to sell their assets to the new agency; only self-sufficient power producers and municipal utilities were excluded from the regulation. Ultimately, ENEL came to absorb the activities of more than 1,000 electricity companies. The choice of nationalization then seemed the only opportunity to meet the growing demand for energy, while keeping the country’s development uniform and harmonious.
The new phase, both for ENEL and for the country, would be characterized by great changes both in the transmission network and in energy production itself. In the 1960s, Italian electricity production grew at an 8 percent annual rate, as compared to 2 percent today. This growth was largely due to the development of thermoelectric sources, facilitated by the extremely low oil prices typical of that decade. The trend was abruptly interrupted by the 1973 and 1979 oil crises; in the 1970s and 1980s, following a temporary decrease in production caused by the economic crisis, there was a first attempt at diversifying energy sources, with a slight recovery of the use of coal and the growth of energy purchase from abroad.
In the 1970s, however, the real challenge concerned nuclear energy. In 1975, the first national energy plan was launched, scheduling, among other things, a strong development of this source. Italy had begun exploitation of nuclear power in the early 1960s; in 1966, Italy figured as the third-largest producer in the world after the United States and the United Kingdom. The late 1970s saw a decisive breakthrough in this direction, with several projects to construct nuclear plants emerging across Italian territory. However, in 1987, in response to Italian public opinion in the wake of the 1986 Chernobyl nuclear disaster, a referendum vote led Italy effectively to abandon the development of nuclear power, and existing plants were closed or converted to other uses.
Electricity
The energy market changed again in the 1990s. In 1992, ENEL became a company, albeit with the Treasury as its sole shareholder. On February 19, 1999, the Parliament approved a bill to liberalize the electricity market, implementing a European directive to that effect. However, its stated aim—to promote the affordability of energy in the context of a competition-based regime—was not achieved in practice. New players were able to operate in the field of electricity production, and the activities that ENEL could not legally maintain were divided between three companies, the “GenCos”: Eurogen, Elettrogen, and Interpower.
From the standpoint of supply, the increasing energy demand of the previous decade and the increasing oil-related economic and geopolitical uncertainties forced producers to intensify their efforts in the search for diverse energy sources. As a result of economic considerations dictated by the cost of oil, the social costs of using coal, and the abandonment of nuclear energy, the solutions were essentially reduced to two: on one hand, the replacement of oil as fuel in thermal power plants with natural gas, a power source with fewer and smaller fuel price fluctuations and more available in that it originated from less politically unstable areas, and on the other hand, the policy of importing energy from abroad, particularly from France and Switzerland (countries with large surpluses of production during off-peak periods). Both solutions were pursued.
In 1992, with Resolution 6, the Italian Interministerial Price Committee established an increase of 6 percent in the price of electricity to the consumer. Revenues from this surcharge are allegedly used, at least in part, to promote research and investment in renewable energy sources; however, the main focus has been, until the present day, the incineration of waste—in the past assimilated into renewable sources. Thanks to these incentives, as well as to strong reductions in the costs of renewables (especially wind energy), some progress has been made on this front.
Renewable Energy
Classic renewable energy sources such as hydropower and geothermal energy have been almost fully exploited already and significant improvements in the use of these sources is unlikely. In 2022, roughly 31 percent of Italy's electricity demands were met by renewable energy. Of that energy, roughly 7.5 percent was sourced from biofuels and waste, 36 percent was sourced from hydro plants, and 33 percent was sourced from solar energy.
Recent Developments
In 2024, it was announced that Italy intended to phase out coal power plants entirely by the end of 2025. As an intermediate step, Italy intended to replace coal with gas-fired power plants. The island of Sardinia was excluded from this plan, but was expected to abandon coal between 2026 and 2028. Additionally, Italy stated that it was able to almost entirely remove its use of Russian gas imports, replacing them with imports from Algeria.
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