“Complex, incoherent and redundant”: The Italian think-tank Ecco rejects the integrated national energy plan (Pniec)

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“The new Integrated national energy and climate plan it is inconsistent with a medium-long term vision of the country’s energy and climate transition. The framework of proposed policies appears complex, redundant and, in several cases, contradictory with respect to the objective”. The judgment is overall below the sufficiency. Here you areThe think tanks Italian for the climate, analyzed the Pniec’s update proposal that on 19 July the Ministry of the Environment and Energy Securitya formally sent to the European Commission. The sending of the 424-page text to Brussels follows that of the executive summary, which took place on 30 June. Here evaluates the official proposal which, as already highlighted in the executive summary “abandons the approach of the Pniec 2019, considered by the ministry itself too ‘optimistic’ in translating policies into credible objectives” and gives the report cards. Measures and forecasts were analyzed in the various sectors with respect to climate objectives and the repercussions on the country’s economic, social and productive system. Out of eleven indicators and 5 votes available, three scored only one vote and the other 8 just two. Among the main critical points, the absence of one roadmap for the transition and exit from fossil fuelsbut also of the declination of the social dimension for the evaluation of individual policies and a description of the decarbonisation markets and the links between the production chains that can seize new opportunities, “despite the need to preserve the competitiveness of the national production system several times in the text”.

The think tank Ecco: “Key elements are missing, for example on the exit from fossil” – According to Chiara Di Mambro, head of decarbonisation policies at Ecco, the text “is missing some key elements”. For example “a strategy to exit fossil fuels consistent with neutrality by 2050, both on coal and gas and more incisive policies on renewables, to achieve Italy’s G7 objective of a decarbonised electricity system by 2035”. The use of fossil natural gas decreases from 41% of gross domestic consumption in 2021, to 33% in 2030, to 30% in 2040, “highlighting once again a ‘flattening’ in the reduction trend”. Dynamics “not reconcilable with medium-long term objectives”. The plan speaks of transition gas (gas “will become the linchpin of a hybrid electric-gas system”). “It is misleading to talk about transition gases in the absence of a clear time horizon” explains Ecco, emphasizing that an emergency vision is offered on this source without considering price and demand evolution scenarios. On the phase out of coal, the approach is defined as contradictory: Sardinia is excluded from the objective of closing coal-fired plants in 2025 and links the objective to interventions on the network, construction of renewable and storage capacity but, at the same time, the methanisation project of the island is re-proposed and the hypothesis of building new gas peaker plants returns if “the closure of coal-fired plants will make their presence necessary”. On the renewable front, on the other hand, the share of RES set at 65% for final consumption in the electricity sector alone should reach at least 76% for Ecco. And then there is the role of technologies indicated as decisive in line, among other things, with EU strategies (Hydrogen and carbon capture and storage are examples) but “in a simplistic way and without indicating a clear strategy for their use, in the face of important investments and risks”.

The electricity sector – As regards the electricity sector, in the text the reference to the Italian commitment to the G7 2022 is missing on the decarbonisation of the electricity system by 2035. According to the think tank, among the tools for electricity security, the capacity market on which Italy continues to focus is “unsuitable to support the existing renewable capacity and the demand response” which allows commercial and industrial consumers to manage their energy consumption. Furthermore, an adequate progression in the authorizations for renewables cannot be foreseen on the horizon, while the proposal to strengthen the guarantees of origin of energy from renewable sources is judged positive.

The civil sector – The policies in support of the civil sector are the same as in 2019. On tax deductions and building redevelopments, “the plan provides for an evolution of the rates proportional to the performance achieved”, but these would only be assessed with respect to the impact on energy consumption and not on emissions. Furthermore, the update of the Strategy for the energy redevelopment of the building stock, approved at the end of 2020, is missing. Technologies based on fossil fuels are not excluded from the incentive, “making the replacement of consumption (thermal in particular) from fossil to renewable sources – reports the think tank – difficult to achieve. The decision to give equal priority to electric and gas heat pumps, moreover, it is not supported by a clear and transparent evaluation”.

The transport sector – The Plan considers a series of existing and additional measures for the development of mass public transport, but does not report their expected impact. According to Ecco, there is no clear reference to the need to support local authorities in regulation to limit the circulation of polluting vehicles, i.e. the exemption for zero-emission vehicles. As far as electric mobility is concerned, “the delay accumulated in the transition to electric mobility on the road does not find in the Plan an alternative proposal to business as usual”. The plan expressly recalls the intention to continue to support endothermic engines as well. On the composition of the electric fleet in the car fleet by 2030, the Plan reports the same objectives as the Pniec 2019 (6.6 million units, of which 4.3 Bev, i.e. fully electric vehicles, powered exclusively by batteries). A number “desirable but implausible, given the accumulated market delay and the proposed neutral technology policies”.

The industrial sector – “The Plan does not present a specific strategy for the decarbonisation of industry” writes Ecco think tank, recalling that the conversion of the Taranto steel production hub is mentioned, although no reference is made to the methods and times of this conversion, against an allocation of one billion euros from Pnrr funds. There is no quantification of the reductions for the ETS, energy intensive and non-ETS sectors. The use of hydrogen is foreseen as one of the solutions for the decarbonisation of the industrial sector. Production will be promoted through capital account grants envisaged by the Pnrr and through a new tariff measure. “To achieve the climate goals, it is important that these incentives are aimed exclusively at the production of green hydrogen” comments, however, Ecco. Finally, in the Plan, by 2030, the final energy consumption of the industrial sector is equal to 24.3 Mtoe. “It is not clear how such a result can be achieved in the light of extensive use of hydrogen and CCUS (carbon capture, use and storage) technologies, solutions with high energy requirements” comments Ecco. And he adds: “The electrification of medium-low temperature heat consumption is not adequately incentivized”. On the contrary, the Plan states that a high degree of electrification of industry would make this sector particularly vulnerable.

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