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New Market Research Report: Italy Power Report Q1 2014

New Energy research report from Business Monitor International is now available from Fast Market Research

 

Boston, MA -- (ReleaseWire) -- 02/10/2014 -- Italy is trying hard to appeal to international investors, with the government reorganising its holdings in gas and power grid networks, and signing investment fund agreements with potential trade partners, such as Russia. But the country is still suffering in the face of economic challenges, and the austerity measures proposed to turn the economy around are unpopular. As such, it is of little surprise that firms such as E.ON are reconsidering their role in Italy's electricity market. In addition, the sluggish economic performance is also having an impact on electricity consumption levels - we have lowered our forecasts this quarter. In the short term at least, we forecast that the renewable energy sector and transmission and distribution projects present the best opportunities for growth.

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Gas-fired power plants account for just under half of Italy's electricity generation capacity, and this figure is unlikely to change over the course of our forecast period; but government ruling means that this gas will come from conventional sources, and not shale gas exploration. The gas-fired power market is likely to see changes over the course of our forecast period, however, given E.ON's announcement that it is considering selling its Italian assets. Italy has no nuclear power stations and following a referendum in mid-2011, Italians voted against turning to nuclear sources of power.

During the 2012-2022 period, Italy's overall power generation is expected to increase by an annual average of 0.9%, to reach 306.0TWh. Driving this growth is an annual 2.0% gain in gas-fired power. Coal-fired generation is expected to fall by 1.5% per annum, with the use of oil-fuelled generation to drop by an annual average of 13.0% over the period.

Following an estimated decrease in 2012 real GDP of 2.4%, BMI forecasts average annual growth of 0.5% between 2012 and 2022. Over the 2012-2022 period, the average annual growth rate for electricity demand is forecast to be 0.8%.

The key trends and developments in the Italian electricity market are:

- Finemeccanica the Italian power engineering company, announced in October 2013 that it has decided to sell its power unit Ansaldo Energia to local state-owned bank, Cassa Depositit e Prestiti. The deal should help Finemeccanica reduce its debt.
- In November 2013, E.ON announced that it had appointed Goldman Sachs to help advise it on the sale of its Italian businesses. E.ON has seven power stations in Italy, and 56% of the electricity it generates is from gas-fired power plants.
- The Italian government revealed in November 2013 that it is planning to move its holdings in the gas and power grid networks into a single investment vehicle to help it attract investors.

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