AleaSoft analyzes the behavior of the Italian electricity market IPEX during 2018 and the influence of the price of fuel and CO2. The transalpine country, which currently meets a large part of its demand from thermal production, and which has a high solar resource, has great potential for the development of photovoltaic production.
The PUN price of the Italian electricity market IPEX has increased in € 8.01 / MWh until November of this year, compared to the average of the first eleven months of 2017. According to the analysis by AleaSoft this price increase has been caused by the increase of the price of fuels and CO2 emission rights, which especially impacts Italy where a high percentage of the demand is met from thermal production.
The ‘ molto expensive ‘ Italian electricity market
In the first eleven months of 2018 the Italian electricity market has positioned itself as the second with highest price among the main European markets behind the British N2EX market.
In the IPEX market year-on-year increases have been recorded in all months of this year, except in January, since in January 2017 the Italian market was impacted by the French nuclear shutdowns. The average PUN price of each month of 2018, with the exception of January, was higher than the average price of the last five years for the corresponding month. In 2018 Sicily was the geographical area with the highest price.
Until November of this year, the Italian electricity demand had increased 2.2% compared to the same months of 2017. In the first quarter of the year the average temperature in Italy was similar to that of the first quarter of 2017 and in the rest of the year it was slightly higher than the previous year.
As analyzed by AleaSoft, although thermal production in 2018 decreased by 5.5% compared to 2017, analyzing the first eleven months of the year, 55.9% of demand was met with this type of technology. During the first eleven months of the year, electricity production from gas was the highest, meeting 24.5% of demand, followed by production with other thermal technologies, with a 20.4% share, while production with coal stood at the fourth place with a 9.3% share.
Renewable production on the rise
On the other hand, production with renewable technologies grew by 13.4% up to November 2018 compared to the same period in 2017. This increase is mainly due to the fact that hydroelectric production increased by 34.4% during this period, positioning itself as the third largest production technology in Italy during the first eleven months of the year. In the period analyzed, wind production increased 1.1% and solar production decreased 9.3% compared to the same period of 2017.
Italy is a net importer of electricity from other countries. In the first eleven months of 2018, the balance of international exchanges accounted for 14.8% of the electricity demand, according to the data analyzed by AleaSoft.
Potential of solar production in Italy
The high thermal production and the absence of nuclear power translate into a greater challenge in terms of CO2 emissions reduction for Italy.
In the transalpine country, the solar resource is high. It is estimated that in the southern part there are more than 2,000 hours of sunshine per year. According to data published by ENTSOE (European Network of Transmission System Operators for Electricity), solar power installed in Italy in 2018 accounts for 4.7 GW, and according to the TYNDP (Ten-Year Network Development Plan) scenarios, also under ENTSOE, in 2040 solar power can be higher than 58 GW, and even 117 GW depending on the most optimistic scenarios. According to AleaSoft, an increase in solar installed power in Italy can bring the price of the IPEX market closer to that of other European countries.