Nov 22, 2024

Italy power price to stay high amid grid limits

Limited cross-border transmission capacity, lagging renewable generation output and high gas dependence compared with other countries continued to set the Italian market apart, they said.
Italian day-ahead power prices averaged EUR 105.13/MWh so far this year compared with EUR 53.07/MWh in France, EUR 74.93/MWh in Germany and EUR 57.26/MWh in Spain.
The price gap widened recently, with Italian prices reaching 10 times French levels during high renewable output periods – exemplified by the weekend of 19/20 October when several European markets saw negative prices, while Italy stayed above EUR 127/MWh.
The higher prices in Italy reflected its supply situation, noted analysts, and it would need to boost connections with Austria and France to increase imports.
“Prices must effectively indicate electricity scarcity or abundance at any given moment,” said Michele Governatori, energy lead at the Italian think tank Ecco. “Greater interconnections between nodes and countries contribute to overall energy cost-effectiveness by putting more resources in competition.”
Scrapping constraints Plans to reintroduce nuclear power in Italy would not help until the mid-2030s, so Italy must boost grid capacity “to eliminate bottlenecks isolating the Italian market”, said Sergio Giraldo, an independent energy consultant.
He also flagged the need for higher electrification to cut gas dependence.
Kristian Ruby, secretary general of power lobby group Eurelectric, saw the key solutions as “fast-tracking renewable deployment as much as possible, reinforcing the grids to accommodate those additional renewables, and accelerating the deployment of non-fossil flexibility sources”.
Francesco Sassi, research fellow at think tank RIE, said: “There’s no single solution to Italy’s price competitiveness. A balanced power mix would help but needs time and stable policies.”
Italy will drop its national single spot price from January 2025 in favour of zonal pricing to align with EU requirements, and it is slated to join European energy balancing project Mari at an undefined date in the future, as well as rejoin grid balancing algorithm Picasso, which it left earlier this year.

Source: montelnews.com