Italy needs 71 GWh of new utility-scale electricity storage capacity by 2030 to meet EU targets to cut emissions by at least 55% by 2030, according to Terna which manages Italy’s transmission grid. ***STOP PRESS*** This Tuesday at 11:00 CET, Energy Post is exclusive media partner to a dedicated webinar (organised by ATA Insights/RENMAD) on Capacity Market Auctions REGISTER FREE HERE. In this article, Sara Stefanini summarises the Terna study, along with others, and lays out Italy’s current and envisioned power mix. The main technologies being considered by Terna are lithium-ion batteries, pumped hydro, mechanical storage, and power-to-gas. Storage is crucial for integrating the intermittent renewables generating the clean energy: an addition of nearly 102 GW of solar and wind by 2030 is needed. The big challenge is that most of Italy’s renewable energy will be generated in the south and needed in demand centres in the north. Being a peninsular, it’s difficult for Italy to import from neighbouring countries. And at present, Italy’s ambitions seem way ahead of the reality: in 2022 it only added 1.6 GW of new solar capacity and 0.5 GW of new wind, far off from the 4 GW a year needed to meet those 2030 targets.
Italy will need to develop around 71 gigawatt hours of new utility-scale electricity storage capacity by 2030 in order to meet the EU’s goal to cut greenhouse gas emissions by at least 55 percent by 2030, according to Italian power transmission system operator Terna which manages the national transmission grid.
Power storage facilities will enable Italy to “structurally shift” its energy mix to more variable renewable energy sources, Terna said. They will need to provide time-shifting and grid services to ensure security and adequacy of the electricity system, and manage overgeneration efficiently.
The European Union’s Fit for 55 package of legislation aims to boost the bloc’s share of renewable energy sources in the total energy mix to at least 40 percent by 2030. Italy has set a goal to have renewables cover 65 percent of the electricity mix by 2030, up from a previous target of 55 percent, according to Terna. That equates to 70 GW of additional installed capacity.
The 71GWh of utility-scale storage needed by 2030 will be in addition to the distributed storage capacity that comes with small-scale solar power plants, and storage capacity contracted in recent capacity market auctions, Terna said. The average power rating of the 71 GWh will need to equal one-eighth of the energy storage capacity.
The transmission system operator will carry out the study at least every two years to extend the list of technologies it takes into account and consider whether they are technologically and commercially mature.
Terna announced in March that it plans to invest over €21 billion in the national electricity grid over the decade, up by 17 percent compared to the previous 10-year plan, to help accelerate the clean energy transition and ensure energy security.
This includes €11 billion for five new “electricity backbones” that will double the exchange capacity between the north and south, and more than 30 strategic infrastructure projects. The projects in the new plan will help to reduce carbon dioxide emissions by 12,000 kt/year by 2040, it said.
Types of power storage
In this study, Terna looked at different kinds of storage, including lithium-ion batteries, pumped hydroelectric, mechanical storage using gases such as air as the carrier fluid, and power-to-gas.
Lithium-ion batteries and pumped hydro are the most technologically proven and commercially mature to date, and the most efficient. Lithium batteries have an efficiency of 80-90 percent; pumped hydro 70-70 percent. This is crucial to meeting Italy’s renewable energy goal, as lower efficiency storage requires greater investments in more renewable capacity as well as grid infrastructure to connect the plants.
A utility-scale lithium batteries facility can be built in one to three years, and can go almost anywhere. However, it only lasts 12-14 years. A pumped hydro plant, on the other hand, takes five to seven years to build, can “easily” last 50 years, but needs to be located near a water source. The capital expenditure for the two technologies is largely similar — €207,000-228,000/MWh for lithium-ion batteries, €213,000-363,000 for pumped hydro.
As of July, Terna had received grid connection requests for lithium-ion battery plants with a combined 74.3 GW of capacity, versus just 7.9 GW for pumped hydroelectric storage plants.
Under its decarbonisation goals, all of Italy’s future energy scenarios up to 2030 and 2040 foresee a strong increase of renewables in the power mix and of electricity in the total energy mix, according to a study Terna conducted in 2022.
Meeting the EU’s Fit-for-55 targets by 2030 requires an “efficient mix” of investments in grid infrastructure, renewables, storage and new digital technologies. That scenario calls for the addition of nearly 102 GW of installed solar and wind power systems by 2030, up by as much as 65 GW compared to 2022.
Storage facilities will be crucial to integrating renewables in any scenario that sees a high deployment, Terna said. Storage makes it possible to shift variable power production from the hours of high output and availability to the hours of low or no availability.
The big challenge
The need for 71 GWh of new storage capacity poses an “immense challenge” to the grid, because most of Italy’s renewable energy will be generated in the south and needed in demand centres in the north, according to Fluence, an energy storage joint venture between Siemens and AES.
It pointed to analysis by Afry Management Consulting, which found that if 70 percent of Italian power is provided by renewables, the north-south network would be congested for 43 percent of the day despite planned improvements to the transmission capacity. Even with 35 percent renewables penetration, the network would be congested for one-third of the day.
Other large countries, such as Germany, face a similar problem with the increasing penetration of renewable energy. Italy’s options are limited, however, because it is a peninsula and has fewer options to import from neighbouring countries.
Terna said in its study that new storage capacity has to be deployed in areas where renewables are expected to grow – mainly in southern Italy and on its islands, where sunshine and wind are abundant. The transmission system operator will therefore have to consider developments to the power grid too.
Renewables accounted for just over 35 percent of Italy’s power demand in October, while non-renewables provided just over 45 percent and foreign exchange the rest, according to Terna’s monthly report.
Thermal power supply in the first 10 months of 2023 declined by 16 percent compared to the same period in 2022, including a 34 percent drop in hard coal power and nearly 5 percent decline in biomass. Renewable hydro power supply increased by nearly 34 percent over the first 10 months of 2023, compared to 2022, photovoltaic rose by nearly 10 percent and wind by nearly 8 percent.
The operating capacity of renewables increased by 4.4 MW in 2023, 88 percent higher than in the same period in 2022.
Meeting the EU’s Fit-for-55 targets for 2030, as well as the bloc’s REPowerEU plan for reducing reliance on Russian fossil fuels, will require “substantial additional efforts” from Italy, the International Energy Agency said in an energy policy review of Italy published in May.
Italy reduced its greenhouse gas emissions by nearly 30 percent between 2005 and 2019, but preliminary data showed a rebound in 2021 following the COVID-19 lockdown, the IEA found. The renewables growth has also stalled since Italy met its EU-mandated 2020 targets, in part because long and complex permitting procedures, high administrative burdens and local opposition have held back new investments.
Recent regulatory changes have led to capacity additions, but as of 2022 Italy only added 1.6 GW of new solar PV capacity and 0.5 GW of new wind – still far off from the 4 GW a year needed to meet its 2030 targets, the IEA said. It recommended that Italy simplify its permitting process along the entire renewable electricity sector value chain.
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Sara Stefanini writes for Energy Post