Since 2023, Paolo Arrigoni has been the President of GSE, the Italian public company responsible for promoting and developing renewable energy sources, energy efficiency, and sustainable mobility. From 2013 to 2022, he served as a Senator of the Republic, Senate Quaestor, member of the 13th Commission for Territory, Environment and Environmental Assets, and member of various committees, including COPASIR, the Schengen Committee, and the Parliamentary Inquiry Commission on the Waste Cycle.
The geopolitical conflicts of recent years have reminded us of the importance of a reliable, flexible, and secure energy supply. In this context, what role does natural gas play?
The coexistence of renewable energy sources and natural gas remains crucial for ensuring a reliable and sustainable energy supply. Renewable energy sources (RES) like wind and solar provide clean, low-impact energy but are subject to weather variations, necessitating a complementary energy source to ensure continuous supply, along with storage systems to retain excess energy produced. Natural gas plays a vital role in this context by providing a “base load” that can be activated during peak demand or low RES production. This balance between different energy sources is essential for ensuring a constant and reliable energy supply while reducing dependence on non-renewable sources and contributing to the transition towards a more sustainable energy system.
What are the main tools for Italy to support the achievement of ambitious European decarbonization goals?
First and foremost, storage systems allow for the storage of excess energy during peak production periods and its release when demand is higher. These systems are essential for ensuring the stability of the electrical system and integrating an increasing share of renewable energy into the grid. By the end of 2023, Italy had about 537,000 distributed storage systems connected to photovoltaic plants, with further growth expected. A recent scenario study by Terna estimates that Italy needs to increase its storage capacity by 2030, with a distribution of 71 GWh from centralized systems and 23 GWh from energy communities and small distributed plants.
Biomethane, on the other hand, offers a sustainable and low-carbon alternative to fossil fuels in “hard-to-abate” sectors such as industry and transportation. The importance of biomethane is also recognized institutionally, with the European REPowerEU plan raising the biomethane production target to 35 bcm by 2030, up from the 18 bcm initially set by the Fit for 55 package. Furthermore, the revision of Italy’s National Integrated Energy and Climate Plan (PNIEC) has set the ambitious goal of producing 6 billion cubic meters of biomethane by 2030, a crucial commitment to reduce the country’s dependence on natural gas imports. GSE plays a fundamental role in promoting biomethane, encouraging the conversion of existing biogas plants and supporting the creation of new plants through a €1.9 billion investment line from the National Recovery and Resilience Plan (PNRR).
Lastly, work is underway to define a national hydrogen strategy, with the establishment of a working group within the Ministry of Environment and Energy Security (MASE) and the drafting of a ministerial decree to establish competitive procedures to support and incentivize green hydrogen production.
In this context, what are the key measures Europe aims to implement with the proposed electricity market reform?
The electricity market reform proposed by the European Commission in March 2023 is a significant step forward for the continent in terms of decarbonization. The reform aims to decouple the price of gas from the price of electricity to reduce the price volatility that has characterized the energy market in recent years. The reform focuses on promoting long-term contracts to ensure greater stability and predictability of energy prices. In this context, Contracts for Difference (CfDs) are given significant importance. These are long-term contracts (about 15-20 years) between renewable energy producers and a government-owned entity (in Italy, the GSE), based on the difference between the market price and an “exercise price” agreed upon in the auction itself, with Italy being a pioneer in this area. These contracts are set to become central to increasing renewable energy capacity by 2030, allowing for a transition to an energy system with two-thirds of its energy from renewable sources.
In parallel, FER2, the decree for incentives to innovative renewables (such as floating wind, floating photovoltaic, marine energy, and advanced or zero-emission geothermal), currently under development, and FERX, which will introduce new auction mechanisms for mature renewables, will play a key role in guiding investments towards solutions that ensure a sustainable energy transition.
The new PNIEC proposal sets ambitious targets for the contribution of renewable energy to the energy transition. How far along is Italy in reaching these targets?
The new proposal of the National Integrated Energy and Climate Plan outlines an ambitious path for Italy’s energy transition, with an increase in the share of renewable energy sources from 30% to 40.5% by 2030, compared to gross final energy consumption in the electricity, thermal, and transport sectors. Looking back, significant progress can be seen: from 2005 to 2022, Italy’s share of renewable energy increased from 7.5% to 19% of gross final consumption. However, to reach the new target set for 2030, a further 21.5% increase is needed, a challenging but essential goal for the country’s future.
In this context, we face multiple challenges. The Italian energy system is characterized by some of the longest permitting processes in Europe, with durations that can reach up to 8 years, and by the resistance of the NIMBY phenomenon, which hinders the construction of RES plants on the territory. Additionally, we are witnessing a transformation of the energy model from centralized to distributed, with over 1.6 million RES plants on the territory requiring greater integration into the electrical grid to maximize efficiency and ensure system stability.
To overcome these challenges, it is necessary to promote a widespread culture of sustainability, simplify permitting processes, enhance distribution and transmission networks, and accelerate the construction of new renewable plants in the most suitable areas. GSE is playing an active role in this process, working closely with MASE and the Regions to achieve an additional 75 GW of installed RES capacity by 2030, in addition to the 67 GW installed by the end of 2023.
Key tools also include Renewable Energy Communities (CER) and widespread self-consumption for the sharing of clean energy. On April 8, GSE activated platforms for submitting requests for incentive tariffs, PNRR funding, and preliminary project suitability assessments, further promoting support for local renewable energy initiatives.
The challenge is demanding, but we are determined to achieve it, always keeping in mind the importance of balancing environmental sustainability with economic and social sustainability.