fondazione istud

Fondazione ISTUDEnergia, ItaliaNuovi competitors e fonti alternativeDr. Piero Manzoni

CEO, Atel Energia S.p.A.

I IAtel Energia I

Well Balanced Energy Supply

CommercialProfitability

EnvironmentalProtection

Reliability ofSupplyGrowing world population

Economic growth

Increase per capita energyconsumption

Development of energy prices

Structural change in industry

Increasing power demand

Parametersin Worldwide Power Generation

Deregulation / Liberalization

Globalization

Privatization

New requirements on powergeneration

Global Trendsin Worldwide Power Generation

SocialWelfare

I IAtel Energia I

EU:• Emissions trading• Promotion of renewables• Balanced energy mix• Phasing out of nuclear energy

Competition: Well Balanced Energy Supply

…have a regionally different focus.

2006 D

USA

EU

2000

USA:• Security of supply through energy mix• Promotion of clean coal technologies• Promotion of renewables

Trends 2000:• Liberalization of electricity markets• Low energy prices• Generally conflict-free world politics• Anthropogenic environmental changes

in discussion

Trends 2000:• Liberalization of electricity markets• Low energy prices• Generally conflict-free world politics• Anthropogenic environmental changes

in discussion

Trends 2006:• Adapting processes to market liberalization• High energy prices• Conflict-filled world politics• Acknowlegdement of anthropogenic

environmental changes

Trends 2006:• Adapting processes to market liberalization• High energy prices• Conflict-filled world politics• Acknowlegdement of anthropogenic

environmental changesAsia

Asia:• Development of primary energy supply• Affordable energy• Environmental issues are not priority

EnvironmentProfitability

Reliabiltiy of Supply

NME

I IAtel Energia I

Italy: Installed capacity and investmentsItaly is passing from a generation system inadequacy to an oversupplysituation. Terna projection of peak demand is skewed towards high increases.

25.0

50.0

75.0

100.0

2002 2006

48.9 58.9

79.3

89.4

Installed gross capacity

Average available capacityat peak

Peak demand

Cap

acity

in G

W

52.655.6

2010/12

69.2

102.2

66.0

+ 11 MW+ 11 MW

+ 15 MW+ 15 MW

elaboration and estimation on Terna public data

I IAtel Energia I

Italy: Generation mixThe actual growth’s trend of gas driven generation continues in the mediumterm, thus increasing the dependence on gas

25%

50%

75%

100%

2002 2006 2010/12

Gas

OilHydro

Other renewableOther (derived gas, etc.)

elaboration on MSE , Terna, GSE and ENEA data

12%

35%

27%

14%

50%

11%

14%

5%

16%

55%

3%

15%

4%7%

Solid

3%6%

17%

6%

I IAtel Energia I

Power Generation Costs by Types of Power Plants

Invest Costs(EUR/kW)

1700

900

500

900

6000

Type of Power Plant

Nuclear(1600 MW, 36%)

Hard Coal(700 MW, 45%)

Gas fired CCPP(800 MW, 58%)

Wind(> 1 MW)

Photovoltaics(1 MW)

8000

7000

5000

2500

2400

Full LoadHours (h/a)

Power Generation Costs(EURct/kWh) *)

4,0

4,6

6,5

7,8

::::

0,7

1,3

2,1

0,05 – 0,5

0,4

Operation-/ Total Costs

Hydro(700 MW) 5000 1800 5,6< 0,1

*) LCC: Life Cycle costs CO2 not consideredOil price at 90 USD

I IAtel Energia I

WindConcentrated Solar Power

Possible tomorrow’s power mix

Privileged feed-in demandsload leveling

Low-carbon base-loadIntermediate-load/peak-loadCoal PP with high efficiencyIGCC (based on coal) with pre-combustion capturePost-combustion capture for retrofitNuclear PPHydro PP (running water)

CCPP:High efficiencyLow emissionsSteep ramp up

Comply with CO2 abatement policiesCO2 cap & trade, CO2 pricingMandatory Carbon Capture and Storage (CCS)R&D fundingRenewables quotaNational nuclear program

Ensure reliable power supplyHigh efficiency and limited resource usageReduced dependence on fuel importsStable grid operationEconomic viability

CO2 abatement while maintaining reliability of supply would be feasible.

I IAtel Energia I

Italy Renewable Generation: incentive and regulationItaly has to reach stringent target on renewable production, to do this there isa strong incentive policy

1992 1999 2005

• Main aim: to support private investments in the power sector• Started in 1992, feed in tariff for renewable and assimilated sources• Ended in 1999 but still in operation due to authorized plants before this data have not started operation

CIP6

• Main aim: to support only renewable sources (Biomass, Hydro, Wind and Bio Waste)• From 2002 power producers are obliged to cover the 2% of their thermoelectric production with

renewable sources (form 2004 to 2006 the obligation increased each year of 0.35%)• Operators can produce green certificates (12 years) with respect to their green production

GreenCertificates

• Main aim: to support photovoltaic development• Started in 2005, feed in tariff (20 years horizon)• The scheme is differentiated per size of plant and level of integration with

buildings (last modification in 2007)

“ContoEnergia”

2008

New GreenCertificatesscheme

• Main aim: to differentiate incentive per technology• 15 years horizon• It will start in 2009

Pöyry elaboration and estimation on public sources data

I IAtel Energia I

Renewable generation – key factsThe investment wave in renewables is bound to continue and it is expectednot to be concentrated on wind technology only

20022002 20062006 EvolutionEvolution

• Starting operation of the Green CertificatesScheme

• All thermoelectric operators (no co-generative) with more than 100 GWhproduction have to cover 2% of theirgeneration with renewable sources

• Renewable production by IAFR sources isstill marginal with respect to GSE CIP6plants

• No market platform

• Starting operation of the Green CertificatesScheme

• All thermoelectric operators (no co-generative) with more than 100 GWhproduction have to cover 2% of theirgeneration with renewable sources

• Renewable production by IAFR sources isstill marginal with respect to GSE CIP6plants

• No market platform

• Green certificates can be tradable on theGME platform

• IAFR generation overtakes GSE CIP 6production

• From 2004 to 2006 the obligation forthermoelectric generation increased 0.35%per year (starting point 2%)

• Strong growth of new independentoperators

• Incentive based on GSE CV CIP6reference price

• Large development of wind production(already installed or planned)

• Green certificates can be tradable on theGME platform

• IAFR generation overtakes GSE CIP 6production

• From 2004 to 2006 the obligation forthermoelectric generation increased 0.35%per year (starting point 2%)

• Strong growth of new independentoperators

• Incentive based on GSE CV CIP6reference price

• Large development of wind production(already installed or planned)

• New green certificate mechanism no morelinked to CIP 6 incentive and differentiatedby technology

• Ambitious target for electricity generationby renewable sources up to 2020 (25%with respect to national electricity netdemand)

• Green certificate oversupply in the yearlynext years even though current plannedcapacity is not sufficient to meet targets

• More diversified portfolio of renewables isexpected

• New green certificate mechanism no morelinked to CIP 6 incentive and differentiatedby technology

• Ambitious target for electricity generationby renewable sources up to 2020 (25%with respect to national electricity netdemand)

• Green certificate oversupply in the yearlynext years even though current plannedcapacity is not sufficient to meet targets

• More diversified portfolio of renewables isexpected

I IAtel Energia I

Power market – key factsThe path toward a more liquid market should accelerate, with thedevelopment of new market platform (physical and financial) on different timehorizons and the increase competition in the retail market

20022002 20062006 EvolutionEvolution

WHOLESALE MARKET• Not structured market platform• Free market composed by CIP6 revenues

and import capacity• Electricity contracts based on regulated

indexation (Ct or PG)

WHOLESALE MARKET• Not structured market platform• Free market composed by CIP6 revenues

and import capacity• Electricity contracts based on regulated

indexation (Ct or PG)

WHOLESALE MARKET• Development and evolution of IPEX• Limited participation by demand into the

market• No forward market• Strong role of AU in terms of CIP6 and

import purchases

WHOLESALE MARKET• Development and evolution of IPEX• Limited participation by demand into the

market• No forward market• Strong role of AU in terms of CIP6 and

import purchases

WHOLESALE MARKET• Forward market, both physical and

derivatives• Development of an intra-day market• Consolidation of carbon trading• Evolution of cross-border trading

WHOLESALE MARKET• Forward market, both physical and

derivatives• Development of an intra-day market• Consolidation of carbon trading• Evolution of cross-border trading

RETAIL MARKET• Free market for large industrial clients only• Enel large presence even if not so dominant

like in generation

RETAIL MARKET• Free market for large industrial clients only• Enel large presence even if not so dominant

like in generation

RETAIL MARKET• Free market to all commercial entities• Enel sold part of its distribution network

corresponding to around 2 mln clients• Switch costs decreasing and market opening

to new players

RETAIL MARKET• Free market to all commercial entities• Enel sold part of its distribution network

corresponding to around 2 mln clients• Switch costs decreasing and market opening

to new players

RETAIL MARKET• Full free market (also residential consumers)• Development of the competition in low

consumption sector (professional anddomestic)

• Market power consolidation of large playerswith over 1 mln clients

RETAIL MARKET• Full free market (also residential consumers)• Development of the competition in low

consumption sector (professional anddomestic)

• Market power consolidation of large playerswith over 1 mln clients

I IAtel Energia I

European Market

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