Context and growth drivers
In a geopolitical scenario strongly conditioned by the conflict in Ukraine, which has placed the issues of energy security and diversification of supplies at the forefront, the new European REPowerEU plan represents the new North Star to strengthen the resilience of the energy system and accelerate the ecological transition.
Towards carbon neutrality in 2050
The international scenario – through the COP21 in Paris, the COP26 in Glasgow and the guidelines of the European Union – requires states and operators in the energy market to accelerate the way towards decarbonisation. The European Union, in particular, has set the target of carbon neutrality in 2050.
The energy transition, started to stave off climate change, must still be accelerated then the Russian invasion of Ukraine. The REPowerEU plan, presented by the European Commission in May 2022, aims to make Europe independent from Russian fossil fuels well before 2030, accelerating the transition to clean energy and at the same time increasing the resilience of the European energy system. In particular, REPowerEU attributes to renewable gases (biomethane and hydrogen) the function of replacing about 50% of the amount of gas that the EU imports from Russia (in 2021 about 155 billion cubic meters).
In this context, the gas DSO are called to play a key role in guaranteeing the energy security of the Union, equipping the respective countries with digital, smart and flexible networks, also able to boost the production of these gases and enable its widespread use.
European and national energy policies
|Green Gas||Accelerate green gases development, such as biomethane and hydrogen, compared to the previous Fit for 55||Development of biomethane to reach 2.5 Bcm by 2026|
|National Energy Production||Nuclear and coal potential phase-out delay||Increase of national gas production to 5 Bcm (+50%)|
|Infrastructures Development||Increase supply from non-Russian routes, new interconnections and maximisation of LNG import capacity||New agreements with exporting countries (Algeria, Azerbaijan, Egypt, Qatar, USA) and new FSRU/LNG|
|Storage||Set up of minimum storage requirement targets by end of summer 2022|
|Gas and Energy prices||Allow actions to mitigate commodity prices impact on end users – Discussion on European gas price||Actions to mitigate commodity prices impact on end users|
|Energy Efficiency||Push for EU energy efficiency target for 2030 from 9% to 13% (vs 2020)||Incentives for buildings renovations (superbonus, ecobonus) and temperatures control|
|FER Acceleration of renewable energy sources||Renewables acceleration, which will have to represent 45% of final energy consumption in 2030 (compared to the previous target of 40%) and will be driven by solar.|
We invest to play a leading role in the energy transition
The strategic choices made in recent years by the Group have anticipated the approach of EU institutions and we are already aligned with the new targets and guidelines set in the REPowerEU.
Given that natural gas will continue to play an important role in the energy transition, because it allows to ensure the flexibility of the system, the most important challenge will be to be able to receive and distribute renewable gases such as biomethane, synthetic methane and green hydrogen. Having a “full digital” network is the technical precondition for effectively managing the distribution of renewable gases.
Currently Italy is the world’s fourth largest biogas producer and biomethane production is expected to accelerate in the coming years supported by regulation
Regarding hydrogen, we are developing several initiatives ongoing to ensure network readiness for hydrogen distribution and blending. We have already completed the analysis and preliminary technical assessment, where the preliminary results has showed high levels of compatibility with hydrogen blends up to 10% and we are identifying the investments necessary to upgrade the network.
The legislative and regulatory framework
The distribution and measurement of natural gas is regulated by the Regulatory Authority for Energy, Networks and Environment (ARERA). Among its functions:
- The calculation and updating of the tariffs
- The provision of rules for access to infrastructure and for the delivery of the related services.
The rate system establishes in particular that the reference revenue for the formulation of rates is determined so as to cover the costs incurred by the operator and allow for a fair return on invested capital.
Three cost categories are recognised:
- The cost of net invested capital for RAB (Regulatory Asset Base) purposes through the application of a rate of return of the same;
- Economic-technical amortisation/depreciation, hedging investment costs;
- Operating costs, hedging operational costs.
We are today in the fifth regulatory period, which starts from 1 January 2020 to 31 December 2025.