The hydropower energy market - Italy

The global hydropower market, one of the cornerstones of renewable energy, has demonstrated a consistent growth trend. In 2022, the market size was estimated at approximately $244 billion and is expected to reach $384.38 billion by 2032, with a CAGR of 4.7% from 2023 to 2032. Hydropower remains the largest source of renewable electricity, exceeding the combined generation of other renewables, despite a growing need for expansion to meet climate targets. Hydropower generation increased by nearly 70 TWh in 2022, amounting to about 4,300 TWh. Regions like China and India continue to lead in capacity additions, while European and U.S. policies are fostering further growth. The Italian market specifically saw a drop in renewable coverage in 2022, falling to 31.6% from 37.1% in 2021, due to a significant reduction in hydropower generation influenced by extraordinary drought. Italy's dependence on energy imports persists, making it one of Europe's largest electricity importers. Despite the challenges of increased demand and energy dependency, the market is also influenced by the Russian-Ukrainian conflict, which underscores the importance of diversifying energy sources and enhancing renewable energy infrastructure.

Shifts and Dynamics in the Italian Hydropower Market

In Italy, the market for hydropower is experiencing several noteworthy trends that reflect the country's commitment to decarbonization and an increasing reliance on renewable energy sources. As the second decade of the 21st century progresses, Italy faces the challenge of meeting its energy demands while also achieving its climate goals. One of the most striking trends in the Italian hydropower market is the fluctuating demand for electricity. Between January and May of 2023, there has been a decrease of approximately 4.5% in electricity demand when compared with the same period in 2022. Despite this decline, renewables have catered to nearly one-third of the electricity demand, signifying a pivot towards green energy. The service sector is the only one to see an increase in consumption—up by about 3.6% in 2022—among all sectors. Investments and interest in renewable energies like hydropower are driven by the European Union's Green New Deal, which emphasizes sustainable and decarbonized energy systems. Hydroelectricity, wind, and solar power are the forerunners in this movement, with hydroelectricity alone accounting for more than half of the electricity generation in 35 countries globally.

However, in the G8 countries, the share of hydropower is dwindling, presenting a complex landscape for policy and investment. Production-wise, hydropower plays a dominant role in sectors with a high demand for electricity. In terms of geographical distribution, regions such as Lombardy, Emilia-Romagna, and Piedmont in the north, as well as Puglia and Sicily in the south, are leading consumers of electricity. Lombardy tops the chart with an electricity consumption between 45 and 50 GWh. The demand for hydroelectricity has given rise to a notable trend in Italy's supply structure. There are over 4,700 hydropower plants, predominantly located along the Alpine arc with major reservoirs in regions like Piedmont, Trentino-Alto Adige, Lombardy, and Veneto. Growth is ongoing, with an increase of over 300 new plants noted from 2019 to 2022. Plants in Abruzzo are particularly significant in terms of installed capacity, showcasing the potential for high-energy output despite a smaller number of plants. Nonetheless, Italy remains one of the largest importers of electricity in Europe, underscoring a persistent gap between domestic production and consumption. This gap is indicative of.

Principal Hydropower Market Players Contributing to Energy Production and Infrastructure

The global hydropower market is sustained by a variety of players, each contributing uniquely to the development, production, and distribution of hydropower energy. These organizations operate at various stages of the hydropower value chain, from the construction of dams and generation of electricity to the supply of critical components and regulatory operations.

• Enel Green Power is one such notable player in the market, engaged in developing and managing activities for the generation of energy from renewable resources. Enel operates multiple types of hydropower plants, including run-of-river, reservoir, and pumped storage plants, all of which are involved in the production of clean, renewable electricity. With a strong focus on sustainability and innovation, Enel Green Power leads by example in the implementation of cutting-edge technologies and the responsible management of water resources.
• Terna is another crucial participant in the hydropower landscape, serving as the owner of the national transmission grid in Italy. Although not directly involved in the generation of hydropower, Terna is responsible for the transmission and dispatching of electricity, ensuring that the energy produced by hydropower plants is effectively distributed to meet the country's electricity demand. As such, Terna plays an integral role in maintaining the stability and efficiency of Italy's power supply.
• In the pursuit of hydropower generation, the International Energy Agency (IEA) emerges as a significant influencer, providing data, research, and policy recommendations that help shape the direction of the sector. The IEA's reports and forecasts serve as a benchmark for many hydropower projects, guiding investment and setting standards for environmentally responsible energy production.
• An important regional market player is CV S.p.A., which operates within the local Italian market and specializes in the management of hydropower plants.

By harnessing the natural water flow through their facilities, they supply the grid with renewable electricity while also contributing to the regional economy and employment. The synergy among these entities defines the current hydropower market. Companies like Enel Green Power and CV S.p.A. directly contribute to energy production, while organizations such as Terna and the IEA provide the necessary oversight and coordination to ensure the smooth operation of the energy system. Collectively, they are instrumental in advancing the goal of producing sustainable and clean energy to meet global electricity needs.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 23/11/2023

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