Italy’s NECP eyes 11pc of power demand from nuclear

Italy aims to generate at least 11pc of its power demand from nuclear energy by 2050 and could double that amount if necessary as part of efforts to meet its climate goals.

In its new national energy and climate plan (NECP) sent to Brussels yesterday, Rome said its "conservative" scenario envisioned installing 8GW of nuclear power capacity using mainly small modular reactors but also fusion plants.

Italy could build as much as 16GW of nuclear capacity depending on developments across the energy system, according to the document. The ‘with-nuclear' option would provide savings of around €17bn ($18.3bn) compared with not using it. It would also mean less gas consumption tied to carbon capture and storage (CCS) technology.

Italy banned nuclear power in a referendum in 1987 after the Chernobyl disaster, but the current right-wing government of Giorgia Meloni has voiced its support for the technology. Last year it set up the national platform for sustainable nuclear power to map out a timeline for a possible return to nuclear power.

In confirmation of targets set last year, Rome said it aimed to install a total of 131GW of renewable energy capacity by 2030, compared to 58GW in 2021, with a view to meeting 63pc of power demand and 39.4pc of total energy consumption.

Most of the new capacity will be solar photovoltaic (PV), with 79GW expected to be installed driven by new subsidies and easier permitting. Wind capacity is expected to contribute 28GW, with offshore wind providing just 2.1GW.

The plan envisages the development of contracts for difference (CfDs) through auctions for larger plants, as well as a framework to boost power-purchasing agreements (PPAs). Italy's NECP also maps out the development of electricity grids and cross-border interconnections.

"The long-term risk is that the tight renewables penetration targets and the CfD mechanism established by the EU to deliver incentives could lead to a negative impact on spot prices, currently driven in Italy by the price of natural gas and carbon allowances," Italian broker Equita said.

The current final revision of Italy's NECP comes after a cross-sector and public consultation. It was submitted to the European Commission for approval on 1 July, a day after the deadline required by EU law.

By Steven Jewkes and Timothy Santonastaso