Against European indications, our energy mix is ​​still based on gas and oil

The weekly round-up on the climate crisis and data on carbon dioxide levels in the atmosphere.

The recovery from the pandemic first, the war in Ukraine and then a dry summer, triggered an earthquake in the energy markets, so much so that Europe in May 2022 with the plan RePowerEU has decided to progressively cut its dependence on Russian gas and review its own upwards objectives for the energy transition.

Italy also moved quickly to reorganize its own gas supplies, in view of a possible interruption of that coming from Russia, on which Italy, until a few months ago, depended for around 40% of its consumption.

In the aftermath of the Russian invasion, the Draghi government did not hesitate to send the then foreign minister to Algeria Luigi Di Maio, accompanied by the CEO of ENI, Claudio Descalzi, to forge agreements that would guarantee Italy supplies of alternative gas to the Russian one.At the beginning of the new year, the Meloni government completed those agreements and also signed some with Libya, with a view to what the prime minister called the new Mattei Plan for Africa.

To understand the impact of new decisions in the energy sector, let's see how the Italian energy mix and let's try to do it starting from the data from 2019, the most recent year in which neither the influence of the pandemic nor the effects of the war in Ukraine were recorded.

How much energy Italy consumes

Comparing the data from the International Energy Agency (IEA) relating to Italy and the National Energy Situation of the Ministry of Ecological Transition (MITE) we can see that In the 2019 The consumption gross domestic energy in Italy, calculated in millions of tonnes of oil equivalent, was 169 Mtoe.

This energy demand has been met since natural gas for approximately the 36%, from petroleum products for the 34%, from renewable sources (which include hydroelectric, solar, wind and other sources) for the 21%.An additional one 5% was covered by imported electricity, while the 4% from solid fuels (coal and wood).

In the 2020, as we said, the effects of the pandemic were also felt on Italian energy consumption, which dropped to 144 Mtoe.

In the 2021 they traced back to 153 Mtoe and, second ministerial data, were satisfied by natural gas for almost the 41%, from petroleum products for almost the 33%, from renewable sources for the 19,5%, while solid fuels settled at 3,5% and the import of electricity accounted for almost 2,5% of energy availability.

If you look at how much Italy has produces and how much matters you can see that the Bel Paese is strongly dependent from abroad:in 2021 we produced 36.4 Mtoe (a figure down by 3.4% compared to the previous year), while the net imports were of 114.6 Mtoe.This means that we depend on foreign countries for almost 75% of the energy we consume.

Gas:national reserves and extractions

In Italy we rely heavily on gas and oil, despite these resources being available in relatively low quantities on the national territory.According to MITE data, Italy mined in approximately 2021 3.5 billion cubic meters (mc) of natural gas from their own national hydrocarbon reserves, compared to a national annual consumption that in the same year it was more than 76 billion cubic meters, according to i ministerial data.In percentage terms, Italy extracts from national soil less than 5% of the gas it consumes.The rest, more than 95%, imports it (later we will see from where).

National natural gas reserves are not abundant.The MITE distinguishes between certain reserves, i.e. "can, with reasonable certainty (probability greater than 90%) be commercially produced", probable reserves, which “can be recovered with reasonable probability (greater than 50%)” e possible reserves, which "it is estimated that we can recover with a decidedly lower degree of probability (much less than 50%)".

The certain reserves amount to just under 40 billion cubic metres, or just over half of the gas that Italy consumes in a year.55.6% of proven reserves are located on land, the rest in the sea.Probable reserves are almost 45 billion cubic meters, while possible reserves are estimated to be 26.7 billion cubic meters.

Furthermore, in 2021, a supply of gas was recorded from storage deposits equal to 1.6 billion of mc, we read in the National Energy Situation, while national production he included even 160 million cubic meters of biomethane.

In a press conference at the beginning of last November, the new head of the Ministry of the Environment and Energy Security (MASE) Gilberto Pichetto Fratin had proposed to include in an "aid decree" an amendment to authorize the extraction of gas from national deposits with capacity exceeding 500 million m3.“We potentially estimate a quantity of 15 billion cubic meters that can be exploited over 10 years” he had declared, also putting forward the possibility of allocating that gas to national energy-intensive companies at a controlled price.In addition to being a solution that is difficult to adapt to market rules, 1.5 billion cubic meters of gas per year would be a very small portion of national consumption.

Petrolium:national reserves, consumption, import and export

The national reserves of petrolium they are largely located in Basilicata and are overall larger than the national gas ones.Nonetheless, their extraction does not have a substantially different impact on national consumption.

In 2021, just under were drawn 5 million tons of oil, compared to a national annual consumption Of 55.4 million tons.In percentage terms, national production contributed for 10%, While  The 90% of consumption came from imports (net of accumulated stocks).The proven national reserves of oil are just less than 80 million tons, the probable ones 75 million, the possible ones 52 million tons.

The oil market is global (unlike the gas market which is local, also defined spot) and indeed in 2021 Italy imported oil from all over the world:fromAfrica (21.7 Mtoe), from the same Europe (17.8 Mtoe), fromAsia (15.2 Mtoe), from Middle East (14.8 Mtoe) and give it United States (2.5 Mtoe).

The beyonds 72 million tonnes of oil equivalent (Mtoe) which we imported there are more of those who we consumed and in fact, since national demand is given by consumption and exports, we have exported 27 Mtoe between crude oil, semi-finished products and petroleum products.

In the first ten months of 2022, however, Italy imported 52.2 million tons of oil, with an increase of 11.6% compared to the same period in 2021.The first supplier country was Russia, due to the particular situation of the Isab refinery (owned by Litasco-Lukoil) which for months has only been importing Russian oil as it has no other supply possibilities.“Excluding this, Russia's weight would be limited to a few percentage points” yes reads on AGEEI (Energy and Infrastructure News Agency).The Isab refinery in the Priolo Gargallo petrochemical hub (Syracuse) continued to import Russian oil in derogation of the sanctions that would otherwise have affected it.Its sale is now being discussed.

Gas:how much we consume and from whom we import it

Italy is a country highly dependent on gas imports (more than 95%), both that which arrives already in gaseous form via pipeline, and what arrives by ship to the state liquid (LNG – Liquefied Natural Gas) and which requires regasifiers (often ships off the coast) in order to then be introduced into the network.

Gods almost 73 billion cubic meters (mc) that we imported in 2021, almost 63 they arrived pipeline.The largest slice, 29 billion m3, has reached Tarvisio from the Russia passing through the gas pipeline TAG (Trans Austria Gas), while some have arrived 21 billion from Transmed (Trans Mediterranean Pipeline) which brings gas fromAlgeria to Mazara del Vallo, in Sicily.

From the pipeline TAP (Trans Adriatic Pipieline) have passed more than 7 billion cubic meters fromAzerbaijan, crossing Türkiye and Greece and arriving at Melendugno in Puglia.Also in Sicily, a Frost, they have arrived 3,2 billion m3 from Libya, through the pipeline Greenstream.The pipeline Transitgas instead he made it reach the Gries Pass little more than 2 billion cubic meters of gas coming from Northern Europe, mainly from Norway and Holland.

The rest of the imports (approx 10 billion m3) in 2021 arrived from LNG and it was regasified in three stations, one onshore, two offshore.About 1 billion cubic meters came from Panigaglia, municipality of Porto Venere in the province of La Spezia, Liguria.Almost 1,5 they arrived from the regasifier of Livorno, while more than 7 from the Adriatic terminal of the island of Porto Levante (municipality of Porto Viro in the province of Rovigo), whose transit is measured from the Cavarzere ground station.

Most of the LNG came from Qatar (about 6.5 billion m3) and fromAlgeria (around 3 billion m3, 2019 data).Smaller shares came from the United States, Trinidad and Tobago, Africa (Nigeria) and Norway.

In 2022 everything changes, but not really

In 2022 the gas market and imports have been disrupted by a combination of factors.The demand for gas by theAsia emerging from the "acute phase" of the pandemic had already grown in 2021, decreasing the flows available to Europe.There international crisis due to the war in Ukraine then, together with a dry summer, they definitely skyrocketed gas prices skyrocketing, pushing Italy to reorganize its supplies.

In the 2022 from the Russia they arrived less than 14 billion cubic meters of gas, while in the same period in 2021 29 had arrived.

In particular in the first 8 months of the year we imported 2 billion cubic meters of gas more (50 billion) compared to what was done in the same period in 2021 (48 billion). Second an analysis by the Bruegel think tank, from September 2021 to October 2022, to stem the gas crisis, Italy spent 60 billion euros, almost 3.5% of its GDP.By January 2023 this spending had risen to over 130 billion, 5.2% of its GDP.

A less harsh winter of expectations, however, caused the subsequent demand for gas to significantly drop, in particular for Russian gas, so much so that if we look at gas imports for the whole of 2022 they are down by almost 10% compared to the previous year: 68.5 billion cubic meters against almost 76 in 2021.The drop in consumption, which also occurred, is not necessarily attributable to national and community energy policies aimed at reducing emissions, but rather to climate change which has made winters milder.

Respect to 2021 we increased beyond 2 billion cubic metres the gas imported via TransMed fromAlgeria (in December we reached 23.5 instead of 21 billion), we increased by almost 4 times the one who arrived at Passo Gries from Northern Europe (arriving to 7.5 billion cubic metres) and we imported 3 billion cubic metres more than Azerbaijani gas from TAP (exceeding 10 billion m3). However, the amount arriving in Gela from Libya fell slightly (2.6 billion cubic meters in 2022 compared to 3.2 the previous year).

Instead, we increased the volumes of LNG that reach the regasifiers: more than double that of Panigaglia (2.2 billion m3) and that of Livorno (3.7 billion m3), while that of Cavarzere in the Adriatic increased by 14% (8.2 billion m3) .

The Italian government has already moved in the direction of aiming for an increase in LNG imports, activating new regasification stations, including that of Piombino, which however initially encountered resistance from the local citizens.

In January, Prime Minister Giorgia Meloni, after confirming the agreements with Algeria, also went to Libya, again accompanied by Eni's CEO Claudio Descalzi.Here he signed another agreement which provides for an investment of 8 billion (in a partnership between Eni and its Libyan counterpart Noc) which will be used to extract gas from two marine deposits off the coast of Tripoli.Supplies should be guaranteed for 25 years:starting from 2026, they should arrive in Italy 8.7 billion cubic meters of gas every year, partly via the Green Stream gas pipeline that arrives in Gela and partly by ship in the form of LNG.By doing so, Italy is tied to gas at least until 2051.

In the meantime Eni, in the name of national energy security, has entered into agreements and collaborations for the extraction and import of gas also with Angola, Cyprus, Egypt, Indonesia, Mozambique, Nigeria, Qatar and the Republic of Congo.

All this happens at a time when the history of energy is going in a completely different direction.According to the report European Electricity Review 2023 of the Ember think tank for the first time in Europe in 2022 the electricity generated by solar and wind (strongly growing) has exceeded that produced by gas: 22% versus 20%.

In 2021 the IEA, in its report Net Zero by 2050, he warned than to achieve the objectives of limiting global warming below 1.5°C no new gas, oil or coal fields should have been inaugurated, but only those already open should have been exhausted.In the presentation of the IPCC report AR6 WG3, last April, the UN secretary general Antonio Guterres he had said that “investing in new fossil fuel infrastructure is morally and economically foolish.But it doesn't have to be that way.We have to triple the speed of the transition towards renewable energy.This means shifting investments from fossil fuels to renewables now.In many cases renewables are the cheapest solution”.

In 2022 Italy has also tripled its gas exports.

Because gas exports are increasing

National gas demand includes both consumption and exports.In fact, every year Italy exports a little gas:In the 2021 he sold 1.54 billion cubic metres abroad, while in 2022 it exported three times as much, 4.5 billion.

An increase in gas exports in a year when i rationing for the winter it might seem very counterintuitive.To understand why this happened we need to look at the European context.

The price of gas on the TTF market (Title Transfer Facility) of Amsterdam serves as a reference for the price at which gas is sold in Europe.In 2022 the price literally exploded.Recently though Arera, the energy regulatory authority in Italy, has decided to unhook the price of gas sold in Italy from the price set to Amsterdam, linking it instead to the market index of PSV Italian (which stands for Virtual Exchange Point).In this way other European countries (mostly Austria, Germany and Eastern countries) in which the  gas was more expensive, they turned to Italy to purchase it at a more convenient price for them.In periods when the actual demand was satisfied, Italy has exported the excess gas.

Coal

In Italy there are no deposits of coal, except the Sulcis Iglesiente field in Sardinia which has been inactive since 2015.Despite the intention to abandon its use by 2025, according to the National Energy Situation in Italy we have imported in 2021 almost 8 million tons of coal:almost 5 from Russia, 1.1 from the United States, 0.7 from Europe, 0.5 from Australia, the rest from South Africa, Colombia and Canada.

Since 2016 we have more than halved coal imports (they were almost 17 million tonnes) as well as shutting down almost half of the coal-fired thermoelectric power plants.However, they exist 7 more (one is inactive), given that the80% of imported coal is destined to become the steam which turns power plant turbines to produce electricity.The remainder 20% it is instead coal from coke a has several industrial uses.

Electricity:production, import and consumption

After a decline due to the pandemic, the demand for electricity in Italy it has almost returned to pre-pandemic levels:in 2021, according to i data provided by Terna, was of 318 TWh (terawatt hours, or billions of kilowatt hours, a measure of energy delivered).

THE'86,5% of demand has been satisfied by national production (approximately 278 TWh), a small part of which (3.8 TWh) was exported.This percentage value can be divided into 51% of sources into energy non-renewable And 36% of energy sources renewable.We have instead imported The 13,5% of the electricity used (46.6 TWh).

As for the national production (without considering imports), in approximately 2021 180 TWh, or approximately the 60% of the total, came from power plants thermoelectric, which they were fueled above all by gas (almost the 50%), but also from solid fuels such as coal And wood (a little more than 6%) and products oil (almost the 4%).National electricity production from Renewable Energy Sources (FER) instead was around 40%.

Poor rainfall affected production hydroelectric, which settled at 15,7% (down almost 6%), equal to approximately 45 TWh.However, it has grownwind power (by more than 10%) than together with the photovoltaic they produced the 16% of national electricity (45.7 TWh).The remainder 8,5% came from geothermal And bioenergy (biomass, urban waste and others).

According to i Terna data in 2022 things went even worse for renewables:the overall demand for electricity fell by only 1% (around 317 TWh), but the share of that generated from sources renewable it went down to 31,1%.The share imported she was always around 13,5%, while that generated from sources non-renewable has increased to over 55%.

At the end of 2022 in Italy they were approximately in operation 22 GW (a measure of power) of hydroelectric and almost 38 GW between solar (25 GW), wind (11.8 GW) and geothermal (0.8 GW).Others 4 GW they came from biomass and other forms of bioenergy.

Of the electricity produced, they come consumed in Italy approximately 300 TWh, most of which from industrial sector (more than 120 TWh), come on services public and from trade (about 80 TWh) and use domestic (over 65TWh).The rest from the sector of transport, from the same sector energetic and from that agricultural, each around the order of 10 TWh.

Objectives to be achieved

“Climate change is one of the great challenges of our time” we read in the National Energy Situation.“The energy sector is one of the main causes of anthropogenic emissions and its decarbonisation therefore represents the key to avoiding the possible effects of climate change.THE'energy efficiency and theelectrification of final consumption will be the main tools for decarbonisation, as the electricity carrier has ahigh efficiency intrinsic".

An example above all:the sector of transport.An analysis document published in April 2022 by Ministry of Sustainable Mobility (now back simply “of infrastructure and transport”) shows that already with the current energy mix, in which renewables contribute only around 40% of electricity production, "the replacement of internal combustion vehicles with electric vehicles it would mean for Italy the reduction of emissions of light road transport 50%”.

This is because the electric motor it's much more efficient of the combustion engine and therefore requires overall less energy consumption.In the first case, in fact, about the80% of the energy introduced as electricity into the vehicle ends up at the wheels, while in the second case it is the opposite:only the 20-30% of the energy of the fuel put into the tank is transmitted to the wheels, while the majority is dispersed in heat and the combustion products remain in the atmosphere, includingcarbon dioxide whose high concentrations cause global warming.

With the package of Green Deal European FitFor55 Europe aims to cut emissions by 2030 55% and aims to bring to the 40% the share of energy produced by renewable (in 2021 in Italy we were at 19.5%).Russia's invasion of Ukraine also pushed the European Commission to develop an accelerated plan for emancipation from Russian gas and with RePowerEU the renewables target was seen as rising to 45%.Consequentially electricity produced from sources renewable must be, by 2030, the85%. At the end of 2022, also due to the drought which reduced the hydroelectric contribution, this percentage was 31%.

In Italy it was published in December 2019 PNIEC (Integrated National Plan for Energy and Climate), a document which however contains data not updated to the latest European objectives.For example, the 2030 objectives are still set at 30% of energy consumption met by renewable sources.The government is working on an updated version of the document which is expected to be published.

Despite this, it is already known that to achieve the European objectives by 2030 it will be necessary at least triple the generation capacity of solar and wind, the two sources on which the energy transition (also according to IEA).

Starting from the almost 38 GW already in operation it will be necessary to add more than 60 GW, we read in the National Energy Strategy.The problem is that in 2021 they were installed approximately 1.3 GW of solar and wind: too little to meet the timetable.They were installed in the first half of 2022 1.2 GW, still too little, but overall with the authorizations issued until December 2022 the MASE estimates it will arrive at 7 GW.

Already in February 2022 the association Future Electricity, which brings together the companies in the electricity sector of Confindustria, had expressed willingness to "invest 85 billion euros in the next 3 years to install 60 GW of new renewable plants and create 80,000 new jobs" Yes read on the site.“60 GW of new renewable plants will do save 15 billion cubic meters of gas every year, that is 20% of imported gas.Or, in other words, over 7 times compared to what the Government estimates it will achieve with the increase in national gas extraction".However, the appeal remained unheard both by the Draghi government and then by that of Giorgia Meloni.It seems like it to have been collected by the new secretary of the Democratic Party Elly Schlein.

To date Italy emits in total approximately 350 million tons of CO₂ equivalent.To reduce them by 55% (compared to 1990 levels) we should fall to 2030 below 200 million tons per year.

A study of the Polytechnic of Milan shows that compared to 1990 we have reduced emissions by approximately 20%, but we are not doing enough to reach the 2030 target:the projections of the trends examined show that by that date we will remain at approximately 309 million tons of CO₂ of annual emissions.More needs to be done in terms of renewable energy production, adaptation of network infrastructure, energy efficiency, sustainable mobility, development of efficient configurations and adoption of the circular economy paradigm.

Preview image via greentechmedia.com