Pippo Ranci is an academic who has dedicated his life to energy. We spoke with him to understand how the world can overcome energy poverty. The path is not easy, above all because it demands a cultural revolution.
Pippo Ranci has long experience in the energy sector. He served as president of the Autorità per l'energia, the current Autorità di regolazione per energia reti e ambiente, and is today a member of Wame.org. He has built a professional career as an academic economist at the Università del Sacro Cuore in Milan and at the European University Institute. He is the author of the book "Poveri di energia", published in 2016 by Il Mulino. That experience gives him a 360-degree view of the world of energy and allows him to identify its trends.
In recent years the issue of "energy poverty", as you defined it in your book, has become a particularly pressing concern. According to data from the International Energy Agency (IEA), 1.1 billion people have no access to electricity and 2.7 billion cannot cook and heat their homes cleanly. Will it be possible to close this gap by 2030? Under what conditions?
According to the International Energy Agency, the electricity problem will be resolved with the exception of sub-Saharan Africa, where there will still be 600 million people — compared with the current 700 million — without access to electricity.
The situation regarding cooking and heating systems using open stoves or braziers is a different matter: in this case the problem will not be resolved. All the efforts made between now and 2030 will only serve to contain the problem, offsetting population growth. The 2.7 billion people who cannot use sustainable cooking systems will fall only to 2.3 billion. The issue does not require large expenditures or infrastructure, but rather a radical change in habits and culture. The situation therefore gives us no cause for optimism; the 2030 target will not be met. But what is most worrying is that there seems to be very little awareness of this, and very little reaction to it.
To what extent will the energy transition — with a shift to renewables and a distributed generation system — help increase access to energy?
Not in any significant way. It is a commendable process in itself, but the energy transition does not involve a transfer of resources from rich countries to poor ones. The greatest impact that the industrialised world can have in bringing about a radical change in the situation in parts of the world that still lack energy access comes through the spread of innovation.
Today, bringing electricity to poor countries that cannot be reached by electricity grids is a process made easier by the deployment of off-grid solar systems. This solution is feasible because commercially viable, cost-effective systems are available on the market. That low cost has been achieved thanks to high demand for photovoltaic panels from wealthy countries, which has made large-scale production possible — above all in China. This situation now benefits poorer countries too. The system could have a substantial positive knock-on effect if, in parallel, a market for low-cost batteries were to develop.
The situation regarding cooking systems is different: there the problem is organisational or cultural. In this case, the availability of low-cost products on the market is not decisive in solving the problem, precisely because the main obstacle is not economic.
What, then, could the solution be?
The greatest success in "clean cooking" has come through policies to roll out small stoves fuelled by bottled gas — not a renewable source, but certainly less polluting than cooking processes that use wood or charcoal. These policies have delivered excellent results in Asia and are now being pursued in African countries. It is certainly not the perfect solution, but given the numbers we are dealing with and the time available, there are few alternatives.
When energy poverty is discussed, the focus tends to be on developing countries. Can we speak of energy poverty in Italy as well?
The subject does come up, but it is a different concept. In Italy it is not a question of infrastructure; it is an income problem — people do not have the money to pay for the energy they need.
Could a change in tariffs be a solution?
To address situations of poverty, a support tool already exists: the energy bonus for electricity and gas. Poverty cannot be tackled through financial transfers alone. Fighting poverty also means providing guaranteed, subsidised access to certain essential services. Traditionally, the monopoly supplier could cover the cost of supplies at a "social" tariff using profits generated from the rest of the market. With liberalisation, that cross-subsidy was no longer possible, and the energy bonus was the instrument that allowed us to open the market to competition.
The energy bonus is not being used to its full potential — that is the problem. According to the latest data, only 35–40 per cent of those entitled to it actually use it, and this is essentially because eligible people either do not know about it or cannot navigate the process of claiming it. It is a serious problem, and an underestimated one. I believe a real effort is needed to communicate the availability of this tool more effectively and to make it easier to access.
Then there is a segment of customers who are not poor and therefore not entitled to the bonus, but who nonetheless need help because they are unable to choose their energy supplier. For these people, action is needed: helping them to find information and to look after their own interests. We must not forget that there is still a substantial portion of the population that cannot read their energy bill. What is needed is to transfer the ease with which young people can choose a phone contract to older people, so that they too are in a position to choose their energy supplier.
From your vantage point, what are the energy priorities for Italy?
Priority number one is Europe — that is, the role Italy can play in the European context. When it comes to energy, it makes no sense to seek supply security at a national level. Common sense tells us that security requires diversification of supply, so as not to be in the hands of the main supplier, which is Russia. That diversification is far easier to achieve as a group of countries than as individual states. We therefore need to contribute to building a stronger European energy policy that serves everyone's interests. Italy has a privileged position due to the number of connections it has with gas-supplying countries other than Russia, and it can make the most of that advantage.
As a second priority, managing the transition to renewables and distributed generation requires grids to be strengthened and managed properly. Distributed generation does not mean abandoning grids; on the contrary, it means having better grids, suited to two-way transmission. A good grid system is complementary to distributed generation, which requires an efficient balancing system.
The third priority is communicating with consumers. This is something we have neglected far too much. We need to radically rethink the way essential information reaches those who need it, and then patiently monitor the communications system. This is a priority if we want to reduce energy poverty.
How can the problems of the energy sector be solved, then?
Most of the problems in the energy sector do not require new laws. It would be worth examining each of the priority issues and seeing in concrete terms what specific roles the parties involved could play, drawing on successful case studies.