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IEG: FROM KEY ENERGY, THE RENEWABLE ENERGY NUMBERS

Press release n. 7 of the 25/10/2021 16.01.48

Rimini, 22nd October 2021 - 2021 is the year of post-pandemic recovery. The main instrument from a financial viewpoint will be the National Recovery and Resilience Plan, through which Italy will be able to receive Next Generation EU funds, commonly known as the Recovery Plan.
Of the Plan´s six missions, two regard the green sector: green revolution and ecological transition, and infrastructure for sustainable mobility. The theme is then transversal to the other missions, from territorial cohesion (ecological transition within the framework of the 2030 South Plan), health (health protection and sustainability) and digitalisation. The sub-topics of these two missions therefore include renewable energy, hydrogen and sustainable mobility, energy efficiency and building renovation. The renewable energy target of 72% by 2030 is particularly ambitious. According to the Minister for Ecological Transition, Roberto Cingolani, the process for this goal begins by simplifying authorisation procedures for renewable plants (currently four to five years). The permit question is very delicate, so much so that a study (Elettricità Futura/Althesys) has shown that, if the current rate of installation of new renewable plants continues - around 0.8 GW per year - Italy would reach the 2030 climate objectives in about 70 years´ time.
In 2020, renewable sources covered 38% of Italy´s electricity needs (41.7% of net national production), compared to 35% in 2019. Production at thermoelectric power stations fell (175.3 billion kilowatt-hours, -6.4%) while, among renewable energy sources, hydroelectric power stations produced a constant amount of electricity (47.9 billion kilowatt-hours, +0.8%). One figure stands out above all others: Italy exported 7.5 billion kilowatt hours of electricity, a net increase of 30% in 2020 compared to 2019.
NEWS FROM THE WORLLD OF RENEWABLES - The European Commission has decided to raise the bar for Europe´s renewable energy targets: the Commission proposes raising the 32% under the current RED II Directive to 38-40% by 2030. This means doubling the current levels of wind, solar and other RES contributions. The review of the directive is part of a much larger project entitled Fit For 55, presented in mid-July, which aims to reduce emissions by 55% by 2030.
In Italy, meanwhile, the seventh call for tenders for renewable energy source incentives (RES1) has just opened, through which the government aims to achieve the foreseen objectives. Gestore dei Servizi Energetici has made over 4,825 MW of power available to operators for the construction of new wind and photovoltaic plants, of which over 3,312 MW through auctions and 260 MW through registers, for a total of over 3,572 MW. For new hydroelectric plants, on the other hand, the call for tenders would provide operators with 104 MW through auctions and 20 MW through registers, for a total of 124 MW. As usual, the call also provides support for the refurbishment of existing wind and hydroelectric plants. For this type of incentive, the capacity put out to tender is over 479 MW through auctions and 110 MW through the registers, for a total of 589 MW.
The amounts made available with the seventh call for tenders, for which it will be possible to send applications by 30 October 2021, include the power not allocated in previous tenders, for a total of 2,485 MW. This lack of power allocation is proof of company and investor mistrust: in fact, 820.6 MW were the subject of authorized requests compared to the 3,315.9 MW of power eligible for incentives, therefore less than 25%. Applications involve all types of plants, both new and refurbished. The reason for this flop is said to be a lack of confidence on the part of companies, which are put off by the very long authorisation processes (5 years on average) and by all kinds of opposition to the works.

FOCUS ON ENERGY EFFICIENCY - The 110% Superbonus is still the main energy efficiency measure in 2021, so much so that the Draghi government has decided to extend it to 2023, a decision that also reflects the great popularity of this measure with the general public. At the end of August, investments eligible for the 110% Superbonus deduction amounted to almost €5.7 million. The data were published by Enea, which reported a total of 37,128 interventions admitted to the deduction; of these, 4,844 were apartment blocks (almost 60% have actually been carried out), 19,072 were single-family buildings (76.3% of the work has been carried out), while independent property units amounted to 13,212 (77.2% completed). Average investments were as follows: just over 547,191 euros for apartment blocks; 98,264 euros for single-family buildings; 87,833 euros for independent units. Instead, there were more than 11,000 energy assessments carried out for 9,195 business premises, of which 3,956 were energy-intensive, according to the ENEA report. During the previous three years (December 2015 - December 2018), 16,105 energy assessments had been sent to ENEA from 8,871 companies, of which 5,862 were large companies and 2,913 were energy-intensive users, with savings from the envisaged interventions estimated at 896.3 ktoe/year. Thanks to these results, Italy is at the top of the EU ranking of the most virtuous countries in the implementation of the European Energy Efficiency Directive for energy audits in companies, and the data on the new round bodes well for the four-year period 2019-23.

FOCUS ON WIND POWER - Despite the difficulties that emerged for auctions, wind power in Italy in 2021 has recorded a growing trend, with 74 MW of new capacity installed. On a regional level, in 2021 Calabria (despite the installation of a 21 MW plant in January), Campania and Liguria all recorded a decrease in connected power compared to 2020. Apulia, Sicily and Sardinia, on the other hand, recorded considerable growth thanks to the activation of three plants in the second quarter: a 28 MW plant in Foggia, a 14.4 MW plant in Trapani and a 6 MW plant in Sassari. No changes were reported in the rest of the country. According to tendential variations, the contribution of wind power is increasing significantly, with 51.5 MW distributed over 19 new installations: + 455% in April, May and June compared to the second quarter of 2020.
As for floating offshore wind farms, 64 expressions of interest were received by Mite from entrepreneurs capable of building them. Of these, 55 came from individual companies and associations of companies, 3 from protection associations and 6 from other parties. This was announced by the Ministry of Ecological Transition itself. If Italy is struggling to get going, the same cannot be said of Europe, which, in 2020, invested 26.3 billion euros in new offshore wind farms, financing 7.1 GW of new capacity to be built in the coming years. This was highlighted by WindEurope data, according to which Europe built 2.9 GW of new offshore wind power systems last year for a grand total of 25 GW in operation today. The EU now aims to have 300 GW by 2050. Nine new offshore wind farms went into operation in five countries: the Netherlands connected 1,493 MW and completed the development of the Borssele wind farm area; Belgium connected 706 MW; the UK 483 MW, Germany 219 MW and Portugal completed the installation of a floating offshore wind farm, co-financed by the EU´s NER300 programme. Europe now has 116 offshore wind farms in 12 countries. Forty per cent of the capacity is in the UK, but new players are coming on board: France will start building its offshore wind farms after final investment decisions on 1 GW, to be built by 2023. Four small floating offshore wind farms are also in the pipeline, providing a large floating offshore wind farm this year.

FOCUS ON SOLAR POWER - Photovoltaic installations increased in the first half of 2021. This was shown by data from the RES Observatory in a study carried out by ANIE Rinnovabili, an association of ANIE Federation, on the basis of Terna´s Gaudì data. More precisely, in 2021, connected power from photovoltaic systems increased by 362 MW, equal to + 40%. The regions that increased their installed power by at least 80% compared to 2020 were Basilicata (+87%), Friuli-Venezia Giulia (+90%), Lazio (+167%), Tuscany (+83%) and Veneto (+80%), while those with a negative trend compared to 2020 were Campania (-11%), Liguria (-8%), Molise (-22%) and Sicily (-38%). Installations of less than 10 kW accounted for 35% of the total capacity, while those of up to 1 MW accounted for 90% of the total. There were eleven plants larger than 1 MW, seven of which were built in the second quarter: two in the province of Viterbo with a capacity of 6 MW each, three in the province of Venice for a total of 15.5 MW and two, in Mantua and Pordenone, with a capacity of 1.2 MW and 1.75 MW respectively. Overall, just over 32,500 plants were connected to the grid in the first half of 2021. A detailed analysis of the trend changes (2021 vs 2020) shows that April and May saw an increase in installed power (+2444% and +15%), while in June there was a slight decrease (-12%). The monthly average for the second quarter of 2021 stands at 70 MW compared to 48 MW for the same period in 2020.

FOCUS ON ELECTRIC STORAGE - By 2020, 39,706 storage systems had been installed. The total power of the storage systems installed was 189 MW, while the maximum capacity used was 293 MWh, plus Terna´s systems totalling 60 MW and 250 MWh. 99.9% of the storage systems installed were combined with a photovoltaic system and 99% of these were combined with a residential photovoltaic system. The most widespread technology is Lithium-based (96.3% of the total) followed by Lead (3.6%) and Supercapacitor (0.1%). There were 11 hydrogen storage systems. Almost all (99%) of the storage systems were smaller than 20 kWh, with a clear prevalence for systems with a capacity of less than or equal to 5 kWh (44%) and those in the range between 5 kWh and 10 kWh (40%). As regards the type of configuration, storage systems were mainly installed on the Direct Current generation side (55%) and this configuration has been growing in recent years due to an increasing number of interventions on existing plants. For systems installed on the alternating current production side, there was a decrease of 4% compared to 2019, while installations of post-production storage systems remained stable compared to 2019. Lombardy was the region with the highest number of installed systems (12,169 storage systems creating 51 MW with a capacity of 85 MWh), followed by Veneto (6,707 storage systems creating 30 MW with a capacity of 51 MWh), Emilia Romagna (4,154 storage systems creating 21 MW with a capacity of 32 MWh) and Piedmont (2,871 storage systems creating 23 MW with a capacity of 29 MWh). The results achieved by the Lombardy and Veneto regions can be attributed to the regional calls for tenders set up by the regions in recent years to support the investment of storage combined with residential photovoltaic systems.

FOCUS ON HYDROGEN - As Ecological Transition Minister, Roberto Cingolani, pointed out, Italy is very interested and proactive in participating in the new ´Hydrogen Mission´. The Italian Hydrogen Strategy Guidelines issued by the Ministry of Economic Development last November set a target of 5 GW of electrolyser capacity by 2030 and indicate investments of around 10 billion, of which 5-7 billion for H2 production (but not for the development of renewable energy plants at the basis of the green hydrogen process), 2-3 billion for infrastructure construction and 1 billion for research. Under the National Recovery and Resilience Plan, 2bn Euros are for the use of hydrogen in sectors that are difficult to decarbonise, but the cost issue remains open: blue hydrogen (obtained from methane steam treatment or gasification combined with CO2 capture techniques) is much cheaper than green hydrogen, produced with electricity from renewable sources. However, by 2030, it may be competitive in terms of cost. According to a new report by the International Renewable Energy Agency (Irena), this prospect is possible with a combination of cost reductions for solar and wind power and improved performance and economies of scale for electrolysers. Cost reductions for green hydrogen include upgrading electrolysers and strategies to reduce their cost by 40% in the short term and up to 80% in the long term. Green hydrogen could play a key role in decarbonisation strategies, particularly in sectors where it is more difficult to switch from fossil fuels such as steel, chemicals, long-haul transport, shipping and aviation, the Irena report explains. However, regulations, market structure, the cost of energy production and electrolysers are still obstacles.

FOCUS ON SUSTAINABLE MOBILITY - In the first quarter of 2021, hybrid electric vehicles accounted for 18.4% of total car sales in the EU, almost doubling their market share in one year. The figures were released by Acea, the association of European car manufacturers. Demand for electrically-charged cars also increased during these three months: battery-powered electric vehicles accounted for 5.7% of all new cars, while plug-in hybrids represented 8.2% of EU registrations. Sales of traditional fossil fuel cars continued to decline in the EU, although petrol and diesel vehicles still account for 65.4% of the car market. In the first quarter of 2021, hybrid electric vehicles in the EU and the UK increased by 90.4% (to almost 594,000 units) compared to the same period last year. From January to March, volumes recorded in the diesel market in Europe fell by 23.4% compared to the same period in the previous year, with most markets reporting double-digit declines in this segment, including three of the top four: Germany (-29.4%), Spain (-28.3%) and France (-11.1%). Similarly, demand for petrol cars continued its downward trend with sales down 19.1%. According to data provided by Ispra, CO2 emissions from road transport will decrease from 2019 to 2030 by 39%, from about 97 to 59 million tons, with an additional decrease by 2050, arriving at 22 million tons. As for emissions, fuel consumption is expected to decrease from 2019 to 2050 by about 60% with a strong decrease in diesel contributions, which will go from about 60% to 8% of the total, while there will be a greater use of methane and alternative fuels, according to Ispra. Road transport showed a 3.9% increase in greenhouse gas emissions compared to 1990 and accounted for 23.4% of total national Co2 equivalent emissions. Fine particulate emissions from road transport from 1990 to 2019 were 73.5% less, representing 10.1% of total national emissions in 2019. For carbon monoxide, emissions had fallen by 92.1% since 1990, accounting for 18.7% of total national emissions in 2019.


ABOUT KEY ENERGY 2021
Event: international trade show; Organizer: Italian Exhibition Group SpA; Frequency: annual; Dates: 26th-29th October; Opening times: 9 am -6.30 pm; Digital extension: 18th October . 5th November; mail: keyenergy@iegexpo.it; website: www.keyenergy.it; facebook: https://www.facebook.com/Keyenergy/; twitter: https://twitter.com/KeyEnergyit; linkedin: https://www.linkedin.com/company/keyenergy/

PRESS CONTACT ITALIAN EXHIBITION GROUP
Head of media relation & corporate communication: Elisabetta Vitali; press office manager: Marco Forcellini; international press office coordinator: Silvia Giorgi; media@iegexpo.it

FOCUS ON ITALIAN EXHIBITION GROUP
Italian Exhibition Group (IEG), listed on the MTA (screen-based stock exchange) organised and managed by Borsa Italiana S.p.A., has built up over the years, through its Rimini and Vicenza venues, a position of domestic leadership in the organisation of trade fairs and conferences, and has developed its foreign activities - also through joint ventures with global or local organisers, in the United States, United Arab Emirates, China, Mexico, India - which have positioned it among the leading European operators in the sector.

This press release contains forecast elements and estimates that reflect the management´s current opinions (´forward-looking statements´), particularly regarding future management performance, realization of investments, cash flow trends and the evolution of the financial structure. For their very nature, forward-looking statements have a component of risk and uncertainty, as they depend on the occurrence of future events. The effective results may differ (even significantly) from those announced, due to numerous factors, including, only by way of example: food service market and tourist flow trends in Italy, gold and jewellery market trends, green economy market trends; the evolution of raw material prices; general macroeconomic conditions; geopolitical factors and evolutions in the legislative framework. Moreover, the information contained in this release, does not claim to be complete, and has not been verified by independent third parties. Forecasts, estimates and objectives contained herein are based on the information available to the Company as at the date of this release.



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