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Renewable energies for a more sustainable Italy
The price race and geopolitical tensions have brought the issue of energy self-sufficiency and security back in the spotlight in our country. Successes and obstacles of a change process.
30.05.2022
reading time: 12 min

Italy has for some time launched a process geared towards energy sustainability, security and gradual self-sufficiency, including through the development of renewable energy sources (RES). This strategic choice is a key element of a set of European policies designed to achieve the objectives set in the fight against climate change. The European Union is also committed to the spread of renewables as a tool to achieve the decarbonisation objectives, together with the development of the circular economy as a paradigm aimed at an economic development that is disconnected from the exploitation of non-renewable natural resources and therefore based on the transition from a linear to a circular economy. The war in Ukraine, tensions over energy prices, as well as the risk of the collapse of gas supplies have in recent weeks brought the issue of renewable energy back in the spotlight as a crucial tool for the country's secure, sustainable and independent development. In this regard, the European Commission has defined the "REPower EU" plan, which sets out to diversify gas supplies, accelerate the spread of renewable gases and replace gas in heating and energy production, with the aim of reducing EU demand of Russian gas by two thirds by the end of the year.  Italy, which has its fair share of problems and delays largely due to the slow authorisation processes and the various constraints to be overcome, has embraced this challenge of change and can boast a good international standing in terms of the spread of RES. The current problems must not overshadow the progress made in this energy and production metamorphosis, towards sustainability and the circular economy.

 

SOME HEADWAY IN ITALY

Our country has achieved some important milestones and also some clear successes over the last fifteen years. For example, the world's largest private operator in the renewables sector is Italian: it is Enel Green Power with 50 GW of electricity generation capacity at the end of 2021 from wind, solar, geothermal and hydroelectric plants located in Europe, the Americas, Asia and Oceania. Italy is the European country with the highest recycling rate out of total waste: with 79.3% of waste sent for recycling, it has an incidence that is almost double the EU average (39.2%) and above the other large European countries such as France (55.8%), United Kingdom (50.5%), Spain (43.5%) and Germany (42.7%). Over 432 thousand Italian companies in the industry and services (with 31.2% of total employees) invested in green products and technologies between 2015 and 2019. And what's more: Italian agriculture is among the most sustainable in Europe, with a quantity of emissions equal to 30 million tons of CO2 equivalent significantly below France (76 million), Germany (66 million), United Kingdom (41 million) and Spain (39 million). (source: “Coesione è competizione (Cohesion is competition)”. 2021 Fondazione Symbola Report).

THE OBJECTIVES, THE TOOLS, THE OBSTACLES

Italy's focus on choosing and investing in renewables finds itself within a framework structured as follows: the 2019 Integrated National Plan for energy and climate, the National Recovery and Resilience Plan (NRRP) and the Draft plan for the ecological transition of July 2021, which is closely linked to the NRRP. The starting point is the growth achieved by RES over the last fifteen years, both on the production and consumption side; an increase that has enabled the country to gain a strong position among the major European economies. The NRRP has set the central role of the ecological transition and, in particular, of the development of renewable energies conducive to the achievement of the decarbonisation objectives.

The government plans to install at least 60 Gigawatts of power from renewable sources if Europe-wide targets are to be achieved, which include a 55% reduction in emissions, compared to 1990, and 72% renewable coverage for the electricity component. Over the last seven years, unfortunately, the average of new installed power capacity has been very low: we are below 1 GW per year and at this rate the country risks achieving the objectives set only in 2100 (source: "Scatto matto alle fonti rinnovabili (Renewable sources checkmated)'', Lega Ambiente). The government, however, recently announced a change of pace in the authorisation processes and investments, reflecting the energy emergency brought about by the tensions on the prices of imported energy and the crisis in Ukraine.  In the first three months of 2022, plans were launched to install "3 GW of power, more than in the previous two years", enough power to serve "the energy needs of a city like Milan" (Roberto Cingolani, Minister of the ecological Transition, interview with Corriere della Sera, 2 April 2022). Furthermore, thanks to the Semplificazioni decree, the executive branch has undertaken to speed up the authorisation process by releasing investments on many dormant projects as well as planning further simplifications that will also include a structured plan designed to identify those areas of the country that are most suited to host the development of new RES systems. The challenge for the development of RES, however, does not simply require a simplified and stable regulatory framework but also a technological innovation process aimed at the development of smart distribution networks, storage batteries, energy communities, etc., all tools capable of compensating for the non-programmability feature of renewable production sources.

 

THE ROLE OF THE IMI CORPORATE & INVESTMENT BANKING DIVISION

The IMI Corporate & Investment Banking Division has chosen to guide this change process, to foster development projects for renewable energy, to support companies interested in the ecological transition in Italy. The IMI Corporate & Investment Banking Division is equipped with adequate resources and skills to support this challenge, not only in terms of financing, but also in terms of research and support in the areas of new technologies, for example for off-shore wind power. It relies on teams dedicated to renewables, the issuance of Green Bonds and in general to the bank's products and services focused on ESG issues.

This consistent and ongoing commitment is part of Intesa Sanpaolo's overall strategy, which also in the new 2022-2025 Business Plan reiterated the priority of financing, support and services in favour of a sustainable and green economy. The bank is committed to reducing CO2 emissions, as indicated by the Power Generation Target.

The Group's strategy and results in the transition towards a sustainable economy are summarised as follows: “In 2021, the Group's loans for the green and circular economy amounted to EUR 8.7 Bn, accounting for 11.2% of the group's total loans. EUR 1.2 Bn was disbursed in 2021 with S-loan, a product targeted for SMEs in order to improve their sustainability profile. In 2021, the Group's disbursements for the Green economy amounted to approximately EUR 6.1 Bn (over EUR 28 Bn in the 2010-2021 period). The offer involves all customer segments: retail customers (37.4%), corporate and non-profit sector (6.3%), corporate & project finance (56.3%)" (2021 Consolidated Non-Financial Statement, Intesa Sanpaolo).

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