During 2016, 778 megawatts of new renewable capacity were installed in Italy, from renewables, in particular solar photovoltaic and wind. The figures confirm a positive market landscape for Italy which, after the dark years of 2012–2015, has finally managed to find a new equilibrium for the sector.

Today the renewables industry supply chain is more solid, also thanks to an inevitable process of operator consolidation linked to acquisition activity. In practice, we are looking at a sector that can boast a degree of long-term stability, with the consequent positive knock-on effects in economic and employment terms. These are some of the conclusions emerging from the latest Renewable Energy Report produced by the Energy&Strategy Group of the School of Management at the Politecnico di Milan.

But 778 MW is a small figure when compared with the 51 gigawatts (GW) of installed renewable capacity (33 GW excluding the "historic" hydroelectric capacity installed) and is therefore insufficient to guarantee the necessary turnover and technological improvement of existing plants. For this to happen, the renewal and modernisation of old renewable energy plants must get under way. "Virtuous revamping and repowering interventions on the installed base are needed," said Vittorio Chiesa, Director of the Energy&Strategy Group.

The renewables market in Italy

New capacity installed during 2016 amounted to 778 MW, approximately 112 MW (-12%) less than in the same period of 2015, but 78 MW more than in 2014. Overall, installed renewable capacity has therefore exceeded the 51 GW threshold.

It is solar photovoltaic that leads the installation rankings with 369 MW, followed by wind with 290 MW, while biomass brings up the rear with just 40 MW. Total installed photovoltaic capacity at the end of 2016 reached 19,261 MW (+24% compared with the previous year) and the market value of new installations is 637 million euros: the residential sector accounted for over 417 million (66% of the total), representing 57% of installed capacity with cost levels per kW of around 2,000 euros.

As regards wind, total installed capacity exceeded 9,450 MW at the end of 2016, with new installations amounting to approximately 290 MW (-30% compared with 2015) and 454.5 million euros, with over 75% of the total (more than 344 million) accounted for by plants larger than 10 MW. In terms of number of plants, however, 97% of new installations concern those below 200 kW, mainly because below 60 kW it is possible to access the incentive directly.

Total installed hydroelectric capacity at the end of 2016, meanwhile, was 18,606 MW, with new installations amounting to approximately 79 MW, volumes similar to those of 2015. The most active regions are Lombardy (13.3 MW), Piedmont (12.8) and Valle d'Aosta (8.4). The market value of new installations is approximately 327 million euros, largely attributable to small-scale plants.

Finally, adding together the various types of biomass used for electricity generation, cumulative capacity at the end of 2016 reached 4.2 GW, with growth of just 40 MW during the year. The downward trend in new installations is such that the market can be described as essentially stagnant.

What the future holds

Market forecasts for the next four years are favourable. According to estimates, new installations of 4.4 GW are expected: 2.3 GW in photovoltaic, 1.6 GW in wind, 320 MW in hydroelectric and 200 MW in all other sources (biomass, geothermal, concentrated solar thermal power).

To this must be added the estimates for market trends (from 2017 to 2025) regarding revamping/repowering interventions, meaning the modernisation and re-powering of old plants. In the optimistic scenario, more than 9 GW (17% of the current installed base, excluding "historic" hydroelectric) of plants are expected to undergo efficiency-improvement works, representing an investment value of approximately 5.5 billion euros; figures that fall to 5.8 GW and 2.2 billion respectively in the pessimistic scenario.

powered by Behind Energy