Energy transition: utility companies set to invest 33 billion in Italia

Italian utility companies are ready to play their part in supporting the country’s energy transition towards a more sustainable, safer and more competitive model, by making investments totalling hundreds of billions over the coming decades.

This is the finding of a study carried out by A2A and Teha and presented at the latest Cernobbio Forum, which draws on the fact that this year will see the conclusion of the PNRR, the largest post-war public investment plan: 194 billion allocated to Italia, without which the country would – according to various observers – be in recession. Who will now take up the baton to ensure continuity in investment and revitalise Italian competitiveness? The energy & utilities sector is ready to do so – as illustrated by Roberto Tasca and Renato Mazzoncini, chairman and CEO of A2A respectively, and Lorenzo Tavazzi, senior partner and board member of Teha Group – by allocating resources to areas that are strategic for Italia’s future, in order to strengthen a system that faces complex challenges, ranging from competitiveness and the security of its supply chains to increasingly noticeable climate change.

The analysis by A2A and Teha estimates that companies in the energy & utility sector could mobilise total private investment in Italia of €315 billion by 2035 and €825 billion by 2050, equivalent to approximately €33 billion per year. In the following areas: generation from renewable and nuclear sources, solutions for the flexibility of the electricity system, electricity and gas infrastructure (still necessary), data centres, district heating, integrated water cycle, waste treatment, recycling and recovery, and biomethane. With the greatest concentration of funding on generation – which needs to be increased – renewables, networks and water management efficiency. These are the critical sectors of Italy’s energy infrastructure, as well as the traditional areas of activity for utilities, which by their very nature lie at the heart of the major challenge of recent years – the energy transition – with the capacity to translate European objectives into regional development from an economic, environmental and social perspective. The study also quantifies the benefits of the resources allocated. In fact, every euro invested in the sector can generate an impact equal to 4.1 times the initial value, thus acting as a driver of development that could help increase annual GDP growth by 10 per cent up to 2050, without affecting public debt, as well as creating up to 300,000 new direct jobs. The investments would also lead to greater uptake of renewables – currently the most cost-effective source of electricity generation – resulting in savings. The study quantifies these savings for businesses at approximately 80 billion cumulatively by 2050: in addition to providing relief in terms of profit margins and competitiveness, if reinvested, they could mean a further 260 billion in added value generated for the national economy.

Looking ahead, we could see a complete electrification of energy consumption. In this scenario, the study estimates that energy costs (including fuels) for households could be reduced by up to 1,000 euros a year (700 euros in a scenario of only partial electrification). This development could see national energy self-sufficiency (still taking fuels into account) rise from the current 26 per cent to 81 per cent by 2050, with reduced exposure to market volatility. There are also significant environmental benefits: a 36 per cent reduction in national CO₂ emissions is estimated by 2050, corresponding to approximately 31 billion euros in avoided social carbon costs. As regards municipal waste, it is envisaged that landfill disposal (currently 4.4 million tonnes per year) will be eliminated, reducing the country’s waste disposal costs by over 500 million by 2050. Finally, the resources could help improve water management in Italia (where 42 per cent of the water abstracted is still lost), an issue that periodically resurfaces as a matter of urgency, particularly after summers such as that of 2026. This would ultimately resolve the issue of wastewater treatment, sparing the country fines of up to 1.5 billion euros by 2050 due to the inadequacy of the sewerage system. The study emphasises that these investments could generate highly transformative, structural and long-lasting effects, potentially exceeding those of the National Recovery and Resilience Plan (PNRR). However, utilities must be enabled to plan for them. This means, first and foremost, simpler authorisation procedures and a clear and favourable regulatory framework.

With the NRRP, ‘for several years we have been able to rely on an extraordinary lever that has underpinned growth and investment: today, the task is to turn that exceptional situation into a method, ensuring continuity in modernisation and channelling capital towards strategic infrastructure and services that affect quality of life. This is essential to ensure that the momentum of recent years is not squandered and to strengthen the country’s economic and productive system,” emphasised Roberto Tasca, chairman of A2A. “In an international landscape characterised by new technological, industrial and energy-related competition, the challenge is not to return to growth, but to choose how to achieve it. The Energy & Utilities sector is where the just transition meets industrial policy: here, European objectives can become concrete investments capable of generating lasting growth. – he added – The data in this Position Paper confirm this: the sector’s resources could facilitate a 36 per cent reduction in CO₂ emissions by 2050 , and every euro invested could generate an economic impact equal to 4.1 times the initial value. Harnessing this potential means supporting not only competitiveness but also the sustainable development of the entire national economy.”