BMI View: Italy's power sector faces numerous challenges in the short - to medium term. As well as falling energy prices across Europe, consumption rates are also declining in Italy, undermining demand for any new installed capacity. Many power firms are phasing out ageing coal-fired power plants and overall we expect to see a decline in thermal capacity over the forecast period. Some growth will be realised in the non-hydropower renewables sector, particularly solar and wind power , which are already well established in Italy. We also expect to see further solid investment in the country's national transmission grid, as well as upgrades and expansion work to cross-border connections. The primary risk to our forecasts, and to investor interest, stems from an uncertain regulatory environment in relation to renewable energy subsidies beyond end - 2016.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Generation, Total, TWh||281.650||281.710||281.630||281.960||282.420||283.010||283.700|
|Consumption, Net Consumption, TWh||292.2||291.6||290.1||288.7||287.8||286.4||285.2|
|Capacity, Net, MW||115,971.9||111,400.4||109,016.1||108,939.4||109,311.9||109,876.7||110,847.4|
Latest Updates And Structural Trends
Natural-gas fired power is currently the largest single contributor to Italy's domestic energy mix, accounting for almost 45% of total electricity generation in 2016. Falling gas prices throughout Europe, while potentially boosting short-term profit margins, will undermine investor interest in this sector and we expect to see limited growth in natural-gas generation throughout the forecast period through to 2025.
The outlook is more subdued for coal and oil-fired thermal power. Ageing thermal infrastructure is being phased out and in 2016 we expect coal-fired generation to contract
12.9%, while oil-fired power will fall 21.0%, with further declines expected throughout the ten-year forecast period.
In contrast, non-hydropower renewables will see slow, but steady growth as new wind and solar power plants are brought online. The wind power sector will receive a short-term boost from the April 2016 European Commission approval of regulatory updates, which will release EUR400mn in subsidies for the year, although a lack of clarity for post-2016 subsidies remains a headwind to growth.
Overall we expect generation in Italy to increase from 281.71TWh in 2016 to 286.95TWh in 2025, averaging annual growth of less than 1% as small gains in renewables are offset by a loss of capacity in thermal power. At the same time consumption is expected to decline from 291.6TWh to 280.4TWh, in line with efficiency gains and the subdued economic outlook in the country.
The Italy Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The Italy Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for Italy to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks Italy's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Italy.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).