Italy’s power mix is heavily reliant on natural gas – it accounts for about a 50% share in 2021 – mostly imported from Russia. While the ongoing war is an opportunity for Italy to change its policy to invest more in cheap renewables and simultaneously become less reliant on expensive fossil fuels imports, the country seems to be implementing a plan of replacing gas with gas. This could have implications for the long-term price of energy and creates the risk of prolonging, or even stranding, fossil fuel infrastructure.19
The share of renewable energy sources in the Italian power mix has increased steadily in the last decade as Italy aims to achieve a 72% renewable share of electricity generation by 2030.12,16 In contrast, the contribution of coal has declined in recent years as Italy aims to phase out coal from its power mix by 2025.12,16
To be consistent with 1.5°C compatible pathways, renewable energy’s share of Italy’s power generation would need to reach between 82-87% by 2030 and 100% by 2040, compared to around 35-40% in 2019.
Natural gas would need to be phased out by 2040 at the latest, while coal would need to be phased out before 2029. Italy already targets a 2025 phase out deadline for coal. 1.5°C pathways require a decline in power sector emissions intensity of 87-89% below 2005 levels by 2030, and would reach -50 gCO₂/kWh by 2050. In the model used here this is mostly through the use of BECCS, however the sustainability of this has not been examined and other options such as Direct Air Capture (DAC) could also be used. Delaying phasing out fossil fuels in the power mix would require the country to rely more heavily later on such costly negative emissions technologies later on.
1 Government of Italy. Plan for the Ecological Transition. 2021.
2 Ministry of the Economy and Finance of the Republic of Italy. Annex to the Economics and Finance Document 2021. 2021.
3 Group of Seven. Carbis Bay G7 Summit Communiqué. GOV.UK. 2021.
4 Government of Italy. STRATEGIA ITALIANA DI LUNGO TERMINE SULLA RIDUZIONE DELLE EMISSIONI DEI GAS A EFFETTO SERRA. 2021.
5 ACEA. 2022 Progress Report – Making the transition to zero-emission mobility. 2022.
6 EEA. EEA greenhouse gas data viewer. European Environmental Agency Data Viewer 2021. (Accessed: 25th January 2021)
7 European Commission. Road transport: Reducing CO2 emissions from vehicles. 2020. Available at: ec.europa.eu/clima/policies/transport/vehicles_de. (Accessed: 15th January 2020)
8 Government of Italy. Italy. 2020 National Inventory Report (NIR). (2020).
9 Instituto Superior per la Protezione e la Ricerca Ambientale. Indicators of efficiency and the decarbonization of the national energy system and the power sector. 2022.
10 European Commission. Commission Staff Working Document Impact Assessment Report. 2021.
11 Eurostat. Final energy consumption by sector – Italy. 2022.
12 International Energy Agency. Energy data and statistics. 2021. Available at: www.iea.org/data-and-statistics/data-tables?country=ITALY. (Accessed: 2nd February 2020)
13 European Commission. COMMISSION STAFF WORKING DOCUMENT Assessment of the final national energy and climate plan of Italy. 2020.
14 Government of Italy. Executive Summary- National long-term strategies: Italy. 2021.
15 European Commission. 2050 long-term strategy. 2021. Available at: ec.europa.eu/clima/policies/strategies/2050_en. (Accessed: 18th May 2021)
16 Government of Italy. Italian Integrated National Energy and Climate Plan. 2019.
17 European Commission. Italy draft national energy and climate plan. 29–30. 2019.
18 IEA. Renewables 2021 Analysis and forecasts to 2026. 2021.
19 Reuters. Italy clinches gas deal with Algeria to temper Russian reliance. Reuters. Available at: www.reuters.com/business/energy/italy-signs-deal-with-algeria-increase-gas-imports-2022-04-11/ (2022).
20 ISPRA. Italian Greenhouse Gas Inventory 1990-2019. 2021.
21 Government of Italy. Italian Greenhouse Gas Inventory 1990-2020: National Inventory Report 2022. 2022.
22 IEA. Global EV Data Explorer. IEA. 2022.
23 World Bank. GDP per capita (current LCU). The World Bank. 2021.
24 Gazzetta Ufficiale Della Repubblica Italiana. Decreto Del Presidente Del Consiglio Dei Ministri 6 Aprille 2022. Riconoscimento degli incentivi per l’acquisto di veicoli non inquinanti. 2022.
25 See assumptions here: 1p5ndc-pathways.climateanalytics.org/methodology/#ita-ndc
26 Electric or hybrid vehicles with off-vehicle charging, powered by methane and hydrogen, and electricity and methane in the case of buses.
27 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available, thus we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.
Italyʼs power mix
terawatt-hour per year
- Renewables incl. biomass
- Unabated fossil
- Nuclear and/or fossil with CCS
- Negative emissions technologies via BECCS
Italyʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- High energy demand - Low CDR reliance
- SSP1 Low CDR reliance
- SSP1 High CDR reliance
- 100%RE
- Low energy demand
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Italy
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 260 | 60 to 70 | 0 | −50 to 0 | 2038 to 2040 |
Relative to reference year in % | −76 to −75% | −100 to −99% | −119 to −101% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 7 | 0 to 1 | 0 | 0 | 2029 |
Share of unabated gas Percent | 49 | 12 to 18 | 0 to 1 | 0 | 2039 to 2040 |
Share of renewable energy Percent | 40 | 82 to 87 | 99 to 100 | 100 | |
Share of unabated fossil fuel Percent | 60 | 13 to 18 | 0 to 1 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Italyʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Italy to be on the order of USD 5 to 41 billion by 2030 and 9 to 55 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and growing energy demand. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.