Italy

Index rank 28

Balance Score

ABC

Energy Sustainability Index Rankings and Balance Score

 2011  2012  2013  Trend Score
Energy Performance  33  26  25   
Energy Security  83  76  69  C
Energy Equity  32  29  34  B
Environmental Sustainability  24  22  24  A
         
Contextual Performance  40  38  39   
Political Strength  43  44  43   
Societal Strength  44  32  32   
Economic Strength  48  50  59   
         
Overall Rank  33  27  28  ABC
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Fossil Fuel Reserves

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Key Metrics

Industrial sector (% of GDP) 23.9
TPEP / TPEC  (net energy importer) 0.17
Emission intensity (kg CO2 per USD) 0.24
Energy affordability (USD per kWh) 0.29
GDP / capita (PPP, USD); GDP Group 30,422 (II)
Energy intensity (million BTU per USD) 0.10
CO2 emissions (metric tons CO2 per capita) 6.36
Population Access to Electricity (%) 100.0
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Index Commentary

Italy drops one place in this year’s Index, slipping to rank 28. Italy is well on its way to balancing the three sides of the energy trilemma, with good performances on the energy equity and environmental sustainability dimensions and a weaker, but improving, energy security ranking. Hampered by an unfavourable total energy production to consumption ratio (the country produces only 17% of the energy it consumes), Italy is increasing both its energy production and the diversity of its electricity fuel mix to try to increase its long-term energy security. The energy equity dimension sees increasing fuel and electricity prices, but, on the whole, Italy continues to provide its citizens with relatively affordable, high-quality energy. Environmental sustainability performance remains relatively stable, with slight declines in CO2 emissions from electricity generation. However, Italy’s ranking on this dimension slips as its improvements are outperformed by other environmentally-conscious countries. Contextual performance is also largely unchanged, with the most notable difference being a drop in macroeconomic stability.

Trends and Outlook

Italy has reached important mitigation policy objectives by transforming its thermoelectric fleet into one of the most efficient in Europe and by changing the energy mix for power generation from oil to cleaner natural gas and renewable energy. Furthermore, several measures were adopted for improving energy efficiency in the residential-commercial and transport sectors. However, additional efforts are necessary to upgrade the existing infrastructure, buildings and car-truck fleets.

Recent policy developments include: 1) two ministerial decrees, approved in July 2012, with reshaped incentives for electricity production from renewable energy and tariffs increasingly in line with those applied in other EU countries; 2) the Dl Sviluppo decree came into force in July 2012 and confirmed tax breaks for restructuring activities, and the improvement of energy performances in buildings (confirmed for 2013 by DI 63/2013); and 3) the government’s commitment to support the development of natural gas infrastructures to improve diversification and support the expansion of renewable energy. Measures are expected to have a positive impact on both energy security and environmental sustainability by lowering the environmental impact of electricity production, reducing Italy’s dependence on imported fossil fuels and improving the Italian balance of payment.

However, concerns remain around the energy equity dimension. The challenge of increasing costs of energy for families and businesses, mainly due to the surge in oil and gas import prices, but also due to incentives to drive the development of renewable energy, needs to be addressed. For example, there needs to be a further integration and convergence towards EU spot liquid markets and price formulas. However, positive developments in natural gas wholesale prices are foreseen in 2013 due to the second phase of the “Reform of the economic conditions of the natural gas protection service” (AEEG Resolution 196/2012/R/gas).