Winter set to test Italy’s energy system

The document analyses the main critical issues threatening the resilience of the national energy system in view of the approaching winter and identifies short- and medium-term development options for facing the crisis.

Read the report’s key messages and download the document for further information.

• In recent months, the price of gas in Europe has reached levels unprecedented in the past fifty years: after an August peak that was off the charts, mainly due to the rush to stock up on gas and great uncertainty over supplies, prices have been falling since September. But they remain at record highs today.
• Italy is more vulnerable than any other country in Europe to these price increases: the proportion of imported gas is higher both as a source for generating electricity – 45% compared to an EU average of 18+% – and as a direct consumable item for enterprises and families – 29% compared to 16% in Europe. In particular, more than half of households and enterprises in our country are contractually exposed to volatile energy prices.
• Due to record gas and electricity prices, the resilience of the Italian energy system is threatened by two main critical issues for the coming winter:
  • the resilience of the budgets of energy enterprises and end users (households and non-energy companies);
  • the risk in relation to stocks being used up.
• Increased gas supply costs are threatening the profitability of energy operators of all sizes: up to 45% of them could record losses in 2022.
• A further burden on energy enterprises’ accounts is the risk of increased arrears on the part of end users due to the cost of their bills doubling.
• On the liquidity management front, demands for large cash guarantees to cover contracts entered into on the European gas exchange weigh heavily, above all for large energy operators.This financial stress risks resulting in defaults for the most vulnerable operators and, for ones with more robust structures, reductions in planned investments.
• The second critical issue is the risk that stocks are used up before the end of winter if the Russian gas flow is interrupted, given the high costs incurred in accumulating them.
• To address these critical issues, it would be necessary: on one hand, to bolster the emergency solutions already approved in Brussels with a coordinated intervention to cap the price of imported gas; on the other, to pursue more strategies at a structural level to secure the energy system, such as diversifying gas supplies and reducing dependence on fossil fuels.