Liberalisation of Italian Electricity
Electricity Abroad The third in a new series focusing on international electricity markets. Enzo Farinella examines the restructuring of the Italian sector.
The Italian National Electricity Supply Board, ENL, has been the main provider of energy in Italy and still remains the biggest in this new era of an open competitive market. Electricity covers the national territory, including rural houses in remote areas since the 70s, while gas is now reaching small towns in the Mezzogiorno of Italy.
Today Enel Energy is not only the biggest national supplier but also the "referent partner" of firms and industries. It supplies flexible and personalised contracts, advice and integrated solutions to manage energy throughout the productive process. It offers a guarantee of continuity and assistance in finding the best solutions for the needs of each firm and also provides systems to monitor and manage consumption data. It provides risk management services, reducing or eliminating price fluctuation caused by cost of fuel. The environment is benefiting too as wind farms populate mountains, while solar panels line valleys as the company develops cleaner methods of energy production.
The Italian energy sector is going through a phase of restructuring in the free competitive market. The process of liberalisation is in accordance with the European Directive, ruled by the Bersani Decree. The Authority for Electric Energy and Gas (AEEG), the Ministry for Productive Activities and the Manager of the National Grid (Gestore della Rete di Trasmissione Nazionale) guarantee its application.
One of the most important steps in the process of liberalisation is the creation of the Energy Stock Exchange: a wholesale electric energy market, based on an auction mechanism. The free open market creates more flexibility, personalised corporate contracts and payment based on actual consumption.
Up until 2002, according to the Bersani Decree, only suitable clients, including consortia whose annual consumption exceeds 20 million kwh and whose members use at least 1 million kwh each per year, could acquire energy on the open market. On the 1st of January 2002, the access threshold was reduced to 9 million kwh. Access to the free market was also granted to clients with more than one production plant with annual consumption of at least 40 million kwh. Since the 29th of April 2003, the suitable client is now any company or public entity that consumes in excess of 0.1 GWh.
The price in the free market is determined by the fixed and variable costs of energy and by the delivery to the point of supply. The Authority for Electric Energy and Gas determines the average cost of energy production and supply every three months. Since January 2000 new tariffs were introduced in the statutory market. The distributors can enjoy the maximum flexibility in offering various tariff options to their clients, as long as they conform to the AEEG rules.
Enel Energy also involves young people in its world. In October 2005, the Minister for Education, Letizia Moratti, at the "Energy In Games" prize-giving ceremony said: "This is a beautiful day for Italian schools, with 300,000 students, 8,400 teachers and 4,400 schools taking part in this project". The young scientists presented 1,113 projects using cinema, literature and history of art to promote an intelligent use of energy, initiatives to value power stations and ways of rationalising consumption. EM
