Energy transition: utility companies set to invest 33 billion for 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 running into 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 public investment plan since the Second World War: 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 Italy’s competitiveness? The energy and utilities sector is ready to do so – as illustrated by Roberto Tasca and Renato Mazzoncini, respectively Chairman and Chief Executive of A2A, 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 – on renewables, grids 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 calculates 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 until 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 cheapest 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 the 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 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 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 projected that landfill disposal (currently 4.4 million tonnes per year) will be eliminated, reducing the country’s waste disposal costs by over 500 million in 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 recurrently arises with urgency, particularly following 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 transformative, structural and long-lasting effects, potentially exceeding those of the National Recovery and Resilience Plan (PNRR). However, utilities must be put in a position to plan for them. This means, first and foremost, simpler authorisation procedures and a clear and favourable regulatory framework.

“With the completion of the NRRP, the challenge for Italy is to ensure sustained growth. And the country already has a concrete lever to achieve this: the investment capacity of the Energy & Utility sector,” commented Renato Mazzoncini, Chief Executive of the A2A Group. “We are talking about €825 billion by 2050 — around €33 billion a year, equivalent to 9 per cent of the average national investment over the last decade. These are substantial resources, earmarked for strategic priorities for Italia: energy security, decarbonisation, infrastructure and the circular economy. Through multi-business models, the Energy & Utility sector is a unique industrial platform, capable of generating economic, environmental and social value,” he added. The benefits? “With greater energy efficiency and the full electrification of consumption, households could save up to 1,000 euros a year. Thanks to renewables, businesses could accumulate savings of around 80 billion by 2050. National energy self-sufficiency could rise from 26 per cent to 81 per cent, reducing the country’s exposure to market volatility. These investments could contribute up to 10 per cent of annual GDP growth over the next twenty-five years, without impacting public debt. The challenge, therefore, is not just how much to invest, but how to transform this capacity into industrial development, competitiveness and security for the country. A2A is ready to play its part, through the investments set out in its Strategic Plan and its presence across the main sectors of the energy transition.’