E‐TRANSITION, 

SUSTAINABILITY AND ECONOMICS

L3 – ELECTRICITY AS KEY COMMODITY FOR
THE ENERGY TRANSITION

Ettore F. Bompard, Daniele Grosso
 OUTLINE

 The «electric triangle»

 Current electricity penetration and expected role of electricity
 Electrification of end-use sectors
FARE CLIC PER MODIFICARE LO STILE DEL TITOLO
 Power systems organization and paradigms for electrification
o Global energy interconnection
o Smart grids
o The energy communities
 The need for storage systems
 Energy Communities
 Benefits and barriers of electrification
 The “Electrify Italy” case study

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THE “ELECTRIC TRIANGLE”

E. F.Bompard – E-Transition, Sustainability and Economics- 3

IMPLEMENTING THE ENERGY TRANSITION:
THE “ELECTRIC TRIANGLE”

The “electric triangle” is a way for

counteracting the issues arising
from another “triangle”, i.e. the one
of the “energy trilemma”

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 CURRENT ELECTRICITY PENETRATION
25% Wide Potential for Electrification
Electricity penetration

20%  Industry:
15% electrification of industrial productive
processes, especially thermal processes in
10% energy intensive industries (iron and steel,
World Electricity TFC (2018): chemical, non-metallic minerals)
5%
24,739 TWh (1.92 Gtoe)
 Residential / Commerce and Services:
0%
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 space cooling, lighting and appliances
Year
almost totally electrified; increase in electric
Electricity penetration in final consumption heat pumps for space heating, electric
(%) - 2018 boilers for water heating, inductive
World EU cooktops for cooking
Industry 42.0 37.3
Transport 1.7 2.3  Transport:
Residential 26.9 28.8 increase in penetration of electric vehicles
Commerce and services 21.5 29.5 (BEVs, PHEVs), complete electrification of
Other 7.9 2.1 railways
Source: IEA Statistics
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 EXPECTED ROLE OF ELECTRICITY
 According to the IEA WEO 2021 the role of electricity in energy end-uses is expected to increase worldwide
end-uses of energy, contributing for up 26% (SPS) and to 49% (NZE) to the final consumption by 2050
 Electrification + decarbonisation of the power sector justify the fact that in 2016, for the first time, global
investment in electricity overtook oil and gas ones
 Digitalisation can enhance efficiency and increase flexibility of power systems, but lead to possible security
issues that have to be carefully analysed and addressed

IEA WEO – Stated Policies Scenario IEA WEO – Net Zero Emissions by 2050 Scenario

70 000 70 000
60 000 60 000
50 000 50 000
[TWh]

40 000

[TWh]
40 000
30 000 30 000
20 000 20 000
10 000 10 000
0 0
2010 2019 2020 2030 2040 2050 2010 2019 2020 2030 2040 2050
Solar PV Wind Hydro Solar PV Wind Hydro
Bioenergy CSP Geothermal Bioenergy CSP Geothermal
Marine Nuclear Hydrogen Marine Nuclear Hydrogen
Coal with CCUS Natural gas with CCUS Coal Coal with CCUS Natural gas with CCUS Coal
Natural gas Oil Natural gas Oil
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 ELECTRIFICATION IN THE RESIDENTIAL SECTOR

 Electrification is relatively easy with respect to other sectors, especially in developed countries,
because of the technological options already available
 Some of the services demands (lighting, space cooling and use of electrical appliances) are
almost fully satisfied through technologies fuelled by electricity.
 The remaining ones (space heating, water heating, cooking) even nowadays can be fulfilled by
electricity-based technologies (heat pumps for space heating and cooling, electric stoves for
space heating, electric boilers for water heating, electric ovens, radiant and inductive cooktops,
electric hot plates for cooking)

 Sectorial policies supporting the penetration of these technologies coupled to a decrease in the
electricity costs for final users could lead to an increase of electrification in the residential sector,
even in a short time period
 These same analysis is valid for the commerce and services sector, whose services demands
are the same of the residential one
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 ELECTRIFICATION IN THE INDUSTRIAL SECTOR
 The electrification of the productive processes, both
 direct (e.g. use of electricity for generating process heat, for powering machineries, for
refrigeration) and
 indirect (i.e. use of electricity for producing hydrogen or synthetic gases to be used in industrial
processes)
could be technically feasible during next decades
 Several studies (e.g. Lechtenböhmer et al.) assess applicability of electrification in energy intensive
industries, as iron and steel, non-metallic mineral (cement, lime, glass, …) and chemical
(petrochemical products, ammonia, chlorine, …)
 The electrification of these subsectors can be reached through ad hoc productive processes and
technologies, like:
 electrowinning in steel production,
 high temperature electro-thermal processes for non-metallic minerals production,
 use of synthetic gases obtained by electricity in petrochemicals production,
 Haber-Bosch process (with hydrogen from water electrolysis) for ammonia production
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 ELECTRIFICATION IN THE TRANSPORT SECTOR
 The transport sector historically rely on fossil fuels, in particular for the road transport, which in 2015
was responsible for 74.9% of the total CO2 emissions of the transport sector for the 17.9% of the
overall global CO2 emissions
 Its decarbonisation can follow two options:
 use of alternative fuels like biofuels, both traditional and advanced (as the ones obtained from
wastes and algae)
 penetration of electrical mobility solutions
 Referring to the EU, electricity is expected to give a relevant contribution to the achievement of the
CO2 emission target of 95 g/km for the new car fleet
 Two technological options can be identified:
 Plug-in Hybrid-Electric Vehicles (PHEVs), which is the one that seems, in the short-/mid-term, to
be closer to a significant market diffusion
 Battery Electric Vehicles (BEVs), which could be supported by the expected increase in battery
performances and the reduction in battery costs (from 209 $/kWh for Lithium-ion batteries in 2017
to about 100-120 $/kWh by 2030)
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POWER SYSTEMS ORGANIZATION
AND PARADIGMS FOR
ELETTRIFICATION

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 POWER SYSTEMS: FUNCTIONS AND SUB‐SYSTEMS

PRIMARY ENERGY
COMMODITIES

ELECTRICITY

 PRODUCTION TRASMISSION UTILIZATION

DISTRIBUTION
 Different primary commodities are exploited to generate, in power plants, electricity (secondary
commodity) to be provided to the different services of final uses (residential, industrial,
transportation…) through transmission and distribution infrastructure.
 The final uses are characterized by different geo-locations, power profiles and energy consumptions.
 To transport/distribute electricity from generation to the final use, we need infrastructures (networks)
that, depending on power values and distances, can be transmission or distribution networks with
different voltage levels. E. F.Bompard – E-Transition, Sustainability and Economics- 11
 SUB‐SYTEMS IN POWER SYSTEMS

 Production: generation plants using various types of energy (chemical, solar, wind,
biomass, ...) to produce electrical power;
 Transmission: a set of high voltage power lines (220 kV, 380 kV,… 1000 kV) that
have the function of carrying the electric power from power plants to load centers
(concentration of aggregated loads)
 Distribution: a set of high, medium, or low voltage (HV, MV, or LV) electrical lines,
which have the function of transferring power from load centers to end users
 Utilization: a set of equipment and electrical devices that convert electricity into
other useful forms. They may be mostly LV or MV. The connection of a user
(aggregating various devices) to the grid maybe HV,MV, LV depending on the rated
power.

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 EMERGING PARADIGM OF EES

 Traditional paradigm: four subsystems.  Generation (centralized)  Transmission 

Distribution  Utilisation. The first three subsystems are devoted to assure “quality electricity” to
the fourth.
 Emerging paradigm: “generation” associated also with subsystem  as the users become
“prosumer” (producer/consumers - huge number of small-sized generators from renewable
sources). Subsystem  becomes active (capable of injecting power) with the possibility of
bidirectional power flows.

Level 1: Generation (centralised, large scale –

hundreds of MW) + Transmission (HHV)

Level 2: Distribution + Utilisation (small scale –

down to KW)

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 REFERENCE PARADIGMS FOR THE ELECTRICAL SYSTEMS
Large Interconnections (Super Grids) Micro Grids (Smart Grids)
Global scale Local scale
Based on UHV transmission systems Absence of a transmission layer
Backbone system to cover large geographical areas Operated in parallel with or isolated form the main grid
Suitable for connecting large production zones with Suitable for exploiting local renewable sources and
consumption areas distributed storage
Useful to globally distribute power from RES in specific Able to integrate small generators like PV-roof, small
world areas hydro, micro wind turbine
Allow a large scale electrification Flexible and autonomous

Both could probably

coexist in the future,
with a proper mix

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GLOBAL ENERGY INTERCONNECTION

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 ELECTRIFICATION THROUGH
“GLOBAL ENERGY INTERCONNECTION”
 Electrification of the energy final-uses, coupled with power generation from renewables and
long-distance transmission through global interconnections
Generation:
 Clean electricity is generated in
 Arctic (wind) and
 Equatorial regions (solar)
Consumption:
 Electricity is delivered to the main
consumption areas (Asia, U.S., EU, etc.)
Transmission:
 GEI require long-distance connections
(2000÷5000 km)

UHVDC grids (±800kV / ±1100kV DC)

based on voltage-source converters seem
Source: Liu Z. (2015), Global Energy Interconnection, Academic Press the best option
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GEI: MULTILEVEL ELECTRICITY SYSTEM

 GEI involve different transmission / distribution levels:

 Intercontinental
 Transnational
 Domestic
 GEI needs efficient control techniques:
 grid access to large-scale intermittent sources
 voltage and frequency stability control
 advanced protection
 fast fault location and recovery
 generation and control of synthetic inertia and
automatic recovery
coupled with advanced wide area monitoring systems
(WAMS) and satellite supported phasor measurement
units (PMU)
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 SUITABLE HVDC TECHNOLOGIES FOR GEI

Suitable for:
• land use with wide corridor spaces

Suitable for:
• land usage with limited corridor
spaces
• Cross sea-straits interconnection

Suitable for:
• Offshore wind farm
• Cross sea-straits interconnection

VSC – Voltage Source Converter LCC – Line Commuted Converter

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 COST OF HVDC LINES VS DISTANCES
140

120
Construction cost (Billion €)

100

80
LCC-OH
LCC-Cable
60
VSC-Cable
VSC-Offshore
40

20

0
0 100 200 300
Distance (km)

INVESTMENT COST FOR HVDC [109 $/100 GW]

VSC – Voltage Source Converter LCC – Line Commuted Converter
REFERENCES
1. D. Retzmann, “HVDC Station Layout, Equipment LCC & VSC and Integration of Renewables using HVDC,” 2012.
2. T. Worzyk, Submarine power cables : design, installation, repair, environmental aspects. Springer, 2009.
3. E. Zaccone, “E‐Highway2050 High voltage underground and subsea cable technology options for future transmission in Europe,” 2014.
4. “Electricity Infrastructure Unit Investment Costs,” 2015.
5. N. Strom, “NETZENTWICKLUNGSPLAN STROM 2030,” NETZENTWICKLUNGSPLAN, 2017.
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 GEI: WORLD NUMBERS ON THE PLAYGROUND

 Distance and capacity of HVDC between

main RES sources and load centers
 Possible energy flows under the
assumption of GEI
 Annual generation (E) and installed
capacity (P) of RES in relevant areas
(wind / solar generation factors = 30%)

From To Option

Bering Strait West America ±1000 kV DC

Bering Strait Japan, S. Korea ±1000 kV DC
Greenland Quebec ±800 kV DC
Source: Politecnico di Torino Middle East West India ±1000 kV DC
Kara Sea North China ±1000 kV DC
Feasible options for point-to-point interconnection
Greenland North U.K. ±800 kV DC
according to the technical-economic characteristics of
EU North Africa ±800 kV DC
different UHV transmission technologies
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 BENEFITS ANALYSIS OF GEI TO THE WORLD
Cash flows to RES abundant areas GEI promotes RES penetrations GEI reduces GHG emission globally
for purchasing cheap electricity*

RES comparisons with different GHG emission under GEI in 2050

Daily cash flows in 2050 with GEI scenarios*
*New tech: with GEI; New Policy: IEA (World Energy Outlook) - “New Policy”
*calculated by summing payments for imported electricity from different areas BAU: IEA (World Energy Outlook) -“current policy”

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 GEI BENEFITS TO EU

With the maximum load Deterred 75 GW install

flow in 2050, GHG capacity in 2050 under
emission w/ and w/o GEI GEI
are 39,559 and 125,983
[tCO2 eq/h], respectively,
reduced CO2 eq 68.6%

Even unevenly
With the maximum load flow
distributed, the
in 2050, generation cost w/
reserve increased
and w/o GEI are 40.3 and
around 5 times w.r.t.
115.3 [M€/h], respectively,
2015
reduced 65.02%

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SMART GRIDS

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 SMART GRID DEFINITIONS

 An upgraded electricity network to which two-way digital communication between

supplier and consumer, intelligent metering and monitoring systems have been
added.
Ref: Commission of the European communities. Communication from the commission to the European
parliament, the council, the European economic and social committee and the committee of the regions.
COM(2011) 202 final. 2011.

 A class of technology people are using to bring utility electricity delivery systems
into the 21st century, using computer-based remote control and automation. These
systems are made possible by two-way communication technology and computer
processing.
Ref: USA Department of Energy

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DRIVERS TOWARD SMART GRIDS

► Electricity Restructuring

Public Policy Drivers

► Environmental Regulations
► National Security

Smart Grids

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FROM TRADTIONAL POWER SYSTEM TO SMART GRID

Traditional power system

Unidirectional flow
Centralized control

New power system : Smart grid

Bidirectional flow
Distributed Generation(DG)
Adv. Loss reduction
Reliability improvement
Cost reduction

Complexity in control
Cons Complexity in Protection
Lake of Technology
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 EMERGING FEATURES

 Market structure based on competition (self-interested

Domain Future
players interacting in competitive markets).
Objectives Reliability, Affordability,
Sustainability  Achievement of the objective of energetic efficiency,
Resources Fossil fuel to renewable environmental protection, affordability, etc. based on
Centralized to massively market mechanisms.
distributed
Highly Variable (Stochastic) 
 Aggregation of distributed generation and storage
Devices Support bidirectional
(small size, low predictable, connected to distribution
and ICT Physical-cyber security system).
Information privacy  Shift from centralised decision making (regulated
Prosumers Seek their own objectives 
monopoly) to distributed decision making, based on the
Produce and consume 
Massive numbers maximisation of the individual utilities of a multitude of
Regulation Long‐term support and lead  self-interested players that interact with a physically
the changes  constrained network through various ICT technologies

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 THE SMART GRID CHAINS
By exploring all the bricks with physical/communication from prosumer side toward distribution, we list
the components and highlight power/communication interface…

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NETWORKED ELECTRICITY SOCIETY
• Power Network
Network of energy (power) flows

WAMS LAN

• Cyber Network
Network of Communications
(information flows)

HAN

• Social Network
Network of People (power consumers,
prosumers) define and update power
behaviors

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 CYBER NETWORK:
THE INTERFACE BETWEEN SOCIAL AND PHYSICAL NETWORKS
 Wide Area Monitoring System:
o Generate data to inform decision making, mitigate wide-area disturbances, and
improve transmission capacity and reliability.

 Distribution Grid Management:

o Processes real-time information from sensors and meters for fault location,
automatic reconfiguration of feeders, voltage and reactive power optimization, or
to control distributed generation.

 Local Area Network

o Substation LAN – Local area network (LAN) used to connect various devices (i.e.,
SCADA devices – Supervisory Control and Data Acquisition) within the substation
o Enterprise LAN – The usual enterprise LAN found within any major business,
usually based on a hierarchy of switched Ethernet
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 DEMAND SIDE INFORMATION NETWORK

• Customer-side Manage:
o Help to manage electricity consumption; it includes energy management
systems, energy storage devices, smart appliances and distributed generation.

• Advanced Metering Infrastructure:

o Involves the deployment of a number of technologies – in addition to advanced
or smart meters that enable two-way flow of information, providing customers
and utilities with data on electricity price and consumption, including the time
and amount of electricity consumed.

• Electric Vehicle Charging System:

o Handles billing, scheduling and other intelligent features for smart charging (grid-
to-vehicle) during low energy demand; even provides ancillary services to the
grid such as capacity reserve, peak load shaving and vehicle-to-grid regulation.
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 COMPLEX ISSUES 

 The distributed decision making interacts with the network structure with physical
(Kirchhoff’s law) and operational constraints defining its (active and reactive) flows
(flow networks).

 The states of the system (feasible/unfeasible, secure/unsecure reliable and

unreliable, stable and instable, vulnerable and resilient, survivable and un-
survivable performance) built in real time and in medium/long term are based on
those distributed devices over its physical layer with a set of communication/control
channels provided by its ICT layer.

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IMPLEMENTATION: MULTILAYER SIMULATION MONITORING
[ Monitoring of both Physical and Social layers ]

[ prosumers linking with their nodes ]

[ social ] [ Physical ]
Prosumer Society Distribution system layer

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SOCIO‐TECHNIC SYSTEMS

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 SMART GRID AS MULTI‐LAYER INTERACTING
COMPLEX SYSTEM
 Smart grid operation and performances are related to various interacting
aspects: social, psychological, technical, economic and environmental.

 Smart grid can be schematized by three layers: social, cyber and physical.

 The layers interact among themselves and with external inputs to determine
the overall performance of the system measured by a set of metrics (energy
savings, environmental pollution, market efficiency …).

 The overall “system control” can be exerted only in terms of policy actions,
implemented by laws and regulations (compelling, prohibiting, incentivising
or de-incentivizing) to influence the behaviour of the various players.

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 INTEROPERABILITY AMONG SYSTEMS

• What business processes and

regulatory constraints apply?
• What functions are required?
• What data should be exchanged?
• How should the information be
exchanged?
• What physical elements are required?

And what can affect all these layers?

Smart Grid Architecture Model is made by putting all the interoperability

layers together on the Smart grid plane basis.

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SMART GRID ARCHITECTURE MODEL (SGAM)

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NEED FOR STORAGE SYSTEMS

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 NEED FOR A MULTICOMMODITY
ENERGY STORAGE SYSTEM

 Renewable Energy Sources (RES) Need for decoupling production and

are generally characterised by: consumption
o Non-controllable output  Need for storage systems
(dependent on meteorological
conditions)
o Variable output
o Predictability only with a small Electrochemical CAES Pumped hydro Hydrogen and Gas

time margin
 Moreover, the operation of the
electrical systems should be based
on a “just in time production” Energy system based on:
(generated power = power absorbed  3 commodities (H2, electricity, CH4) and
by loads + losses, at each time  3 sources (eRES, biomass, NG)
instant)

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ENERGY COMMUNITIES

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 THE ENERGY COMMUNITIES: SOME DEFINITIONS

 Community energy refers to a wide range of collective energy actions involving citizens
participation in the energy system. Community energy projects are characterised by several levels
of community involvement in decision-making and benefits sharing. They may refer to a
community limited by a geographical location or a community of interest (Walker and Devine-
Wright, 2008; from JRC (2020), “Energy communities: an overview of energy and social
innovation”)
 The EU “Clean Energy Package” (adopted in 2019) identifies given categories of community
energy initiatives as “energy communities”
 Energy communities can be defined as “a way to organise collective energy actions around open,
democratic participation and governance and the provision of benefits for the members or the
local community” (Roberts et al., 2019; from JRC (2020), “Energy communities: an overview of
energy and social innovation”)
 The EU, in particular, has proposed two types of energy community:
o The Renewable Energy Community
o The Citizen Energy Community

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 THE TWO EU TYPES OF ENERGY COMMUNITIES

The European Union identifies 2 types of “energy communities”

Renewable Energy Community (REC; Renewable Citizen Energy Community (CEC; Electricity
Energy Directive 2018/2001 – RED II) Market Directive 2019/944)

Autonomous entity based on the voluntary Autonomous subject whose purposes,

participation of public and private subjects, whose
main goal is to provide (through the production and
sharing of renewable energy also by means of
storage systems) environmental, economic or social
benefits at community level, rather than financial
profits. The activity of electricity distribution is not
contemplated
participation and social mission are similar to
those of the REC, but it is not strictly focused on
renewable energy. It may include the ownership
and management of the internal community
electricity distribution network and may include
the provision of energy efficiency services and
other energy services to the members of the
community

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 DIFFERENCES AMONG REC AND CEC – 1

RENEWABLE ENERGY COMMUNITY CITIZEN ENERGY COMMUNITY

 Geographical Scope: Have to be in the  Geographical Scope: No geographical

proximity of renewable energy projects that limitation
are owned and developed by that community
 Activities: only electricity sector, with
 Activities: only renewable energy for generation based on renewables or fossil fuels
electricity and heat production
 Participants: wide participation, including
 Participants: membership restricted to persons, local authorities and micro, small,
persons, local authorities and micro, small medium and large enterprises, as long as
and medium-sized enterprises whose members that are engaged in large-scale
participation does not represent their primary commercial activity for which the energy sector
economic activity is a primary economic activity do not exercise
any decision-making power

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 DIFFERENCES AMONG REC AND CEC – 2
RENEWABLE ENERGY COMMUNITY
 Autonomy: should remain autonomous from
individual members and other traditional
market actors that participate in the
community as members or shareholders
 Control: can be controlled by micro, small,
and medium-sized enterprises that are
located in the proximity of the renewable
energy project
CITIZEN ENERGY COMMUNITY
 Autonomy: decision-making power should be
limited to members or shareholders that are not
engaged in large-scale commercial activity and
for which the energy sector does not represent
a primary economic activity
 Control: exclude medium-sized and large
enterprises from exercising an effective control,
intended as “the possibility of exercising
decisive influence on an undertaking”
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 THE KEY ROLE OF PROSUMERS

 The prosumer (art.21 EU directive 2018/2001) coincides with a self-

consumer of renewable energy which, individually or through
aggregators, can:
o produce renewable energy, including for its own consumption
o store and sell production surplus
o install and manage electricity storage systems combined with systems
of generation from RES for self-consumption
o maintain rights and obligations as an end customer

 A similar figure to the prosumer is the one of the active customer (art. 2 EU directive 944/2019),
i.e. a final customer - or a group of jointly acting final customers - who consumes or stores
electricity (regardless of the source) generated within its premises located within confined
boundaries or, where permitted, within other premises, or who sells self-generated electricity or
participates in flexibility or energy efficiency schemes, provided that such activities do not
constitute main commercial or professional activity

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 THE ITALIAN LEGISLATION

 The D.L. 162/2019 (“milleproroghe”, converted into L. 8/2020, firstly (and experimentally)
introduced the concept of energy community, as first implementation of art. 21 and 22 of the RED
II Directive (2018/2001)
 It distinguishes between:
o Energy self-consumers, who act collectively and whose geographical perimeter is represented
by the same building or block of flats;
o Renewable Energy Communities, whose perimeter is represented by the low voltage networks
belonging to the same medium / low voltage transformer substation.
 In both cases, networks other than those currently permitted are not created and managed
 This law has been accompanied by two related implementing measures:
o ARERA resolution 318/2020/R/eel, which sets that the capacity of the renewable-based
electricity generation plants cannot exceed 200 kW
o The Ministerial Decree (DM) 16 September 2020 of the MiSE, which includes incentives to
ensure the profitability of the investment in renewables-based generation plants and in the
possible related storage systems

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 THE MOST RECENT UPDATES AND THE ROLE IN THE PNRR
 Recently, the d.lgs 8 November 2021, fully implementing the RED II (2018/2001) European Directive,
entered into force on December 15th, introduced two relevant modifications:
o The possibility of installing larger plants, with a maximum capacity >200 kW, up to 1 MW
o The possibility of connecting to the community members that belongs to the same primary station
and not the same secondary one  enlargement of the perimeter of the communities (in some
rural areas, also including more municipalities under the same community)
 Energy communities are also included in the National
Recovery and Resilience Plan (PNRR) for the economic
recovery from the COVID-19 pandemic phase
 In Mission 2 (Green revolution and energy transition),
section M2C2 (Renewable energy, hydrogen, network
and sustainable mobility), 2.2 billion € (9.3% of the
overall M2C2 budget) are allocated for investments in
energy communities, with the goal of installing 2000 MW
of distributed electricity generation capacity, from which
~2500 GWh of electricity are expected, leading to a
reduction of 1.5 Mt/y of CO2 emissions
E. F.Bompard – E-Transition, Sustainability and Economics- 47
 THE ENERGY COMMUNITIES IN ITALY

 In 2021, in Italy, there were about 20

renewable energy communities already
active or ready to be activated, and other 7
REC were planned (Politecnico di Milano –
Electricity Market Report 2021; Legambiente
– Rapporto Comunità Rinnovabili 2021)
 The capacity of the production plants
generally ranges between 20 kW and 60
kW, even with significant exceptions
 A relevant growth is expected for the future:
by 2025 about 40,000 energy communities
in Italy (involving about 1.2 million
households, 200,000 offices and 10,000
SME) are expected, leading to 10,500 new
job positions (Federmanager-AIEE study on Source: Politecnico di Milano (2021), Electricity Market Report
Politecnico di Milano data)

E. F.Bompard – E-Transition, Sustainability and Economics- 48

BENEFITS AND BARRIERS OF ELECTRIFICATION

E. F.Bompard – E-Transition, Sustainability and Economics- 49

 BENEFITS AND BARRIERS OF ELECTRIFICATION
Electrification benefits, changes and
impacts:
 energy efficiency increase thanks to
electric powered technologies
 renewables penetration increase
 decarbonisation and creation of a
sustainable system
 Creation of new jobs positions, with a
new industrial value chain
Barriers to electrification:
 need to modify customers habits and to
overcome some negative individual
perceptions
 high initial investment cost for
technology development and substitution
 current high electricity-gas prices ratio
 technological lock-in
 lack of adequate regulation
E. F.Bompard – E-Transition, Sustainability and Economics- 50
THE “ELECTRIFY ITALY” CASE STUDY

E. F.Bompard – E-Transition, Sustainability and Economics- 51

 THE “ELECTRIFY ITALY” STUDY: MAIN GOALS

The electricity triangle is the concept at the

basis of the EI study

Discuss electrification as a major option for implementing energy transition in

Italy, starting from the present status of electrification and building a forward-looking
vision of possible scenarios in 2022, 2030 and 2050.

Integrate a multi-focus perspective, with analysis of demand and supply, to study

the potential electrification of three main final uses (residential, industrial and mobility
sectors) and the possible renewable penetration in Italy up to 2050.

Quantitatively estimate the possible benefits of electrification of the Italian energy

system through the calculation of Key Performance Indicators in four different areas:
energy, economy, environment and society.
E. F.Bompard – E-Transition, Sustainability and Economics- 52
 METHODOLOGICAL APPROACH

Generation

End-uses

Analysis of the selected supply ITELEC2050 scenario KPIs

and demand sectors: RES definition through projections identification and
penetration; current state of the from the sectorial analysis calculation
art and electrification potential and KPIs assessment in
and options for the end-use 2022, 2030 and 2050
sectors (building, industry,
mobility)

Perspectives on electrification from interviews to energy sector players

E. F.Bompard – E-Transition, Sustainability and Economics- 53

 KEY PERFORMANCE INDICATORS

• TPES variation
• TFC variation
• Electrification rate
• Per capita TFC variation
• RES share in electricity production
• Energy dependence variation • Energy intensity variation
• Contribution of electrification to • Final energy consumption intensity
TPES variation variation
• Contribution of electrification to • Carbon intensity of GDP variation
TFC variation • Weighted LCOE variation
• Contribution of electrification to • Contribution of electrification to
per capita TFC variation energy intensity variation
• Contribution of electrification to • Contribution of electrification to
energy dependence variation carbon intensity variation

• CO2 emissions reduction • Healthcare savings related to air

• Decarbonisation of power sector pollution variation
• PM pollution variation • Productivity savings related to air
• NOx pollution variation pollution variation
• Contribution of electrification to • Life savings related to air pollution
CO2 emissions reduction variation
• Contribution of electrification to • Total health benefits related to air
PM pollution variation pollution variation
• Contribution of electrification to • Affordability variation
NOx pollution variation • Contribution of electrification to
total health benefits variation
• Contribution of electrification to
All the variations are assessed w.r.t. 2015 affordability variation
E. F.Bompard – E-Transition, Sustainability and Economics- 54
 ELECTRICITY GENERATION
Solar role in power generation
 Electricity generation will be mainly based on RES (85.6% in
100%
2050, from 38.8% in 2015), with a key role of solar
75%
 Solar is expected to cover 62% of the total power generation
in 2050 (w.r.t. 8% in 2015), while wind and hydro plants are 50%
constrained (to 3% and 11% respectively) by intrinsic 62%
25%
resource limitations, and thermal plants (10%) by cost (and 24%
34%
emissions) 0% 8%
2015 2022 2030 2050
 To reach this PV share, in 2050 the surface occupied by the Solar Other-RES Non-RES

solar panels will be ~1.1 times the extension of Rome Penetration of RES in different scenarios
100%
 The high RES share in the power sector is possible CP: Current Policy Scenario
SD: Sustainable Development Scenario
75%
regardless of CO2 price: benefit of high CO2 price on RES
penetration is limited and is below 6% in 2050 50%

25%
 LCOE of solar will slightly reduce, reaching 0.036 €/kWh in
2050 0%

 Storage will play a key role, with ~112 GW installed, mainly

(95%) electrochemical batteries
2015 2022 2030 2050
Source: Electrify Italy E. F.Bompard – E-Transition, Sustainability and Economics- 55
 ENERGY IMPACTS
Electricity consumption by sector (%)
60% 53%
50% 42%
 Electricity can fulfill 46% by 2050 of the final energy 39% 39% 40% 41%
40%
consumption in Italy, with a key contribution of building (20% 27%
30%
of the electricity in the TFC by 2050) and transport sectors 19%
20% 15%
8%
 Electricity generation will be mainly based on RES (85.6% in 10%
3% 4%
2050, from 38.8% in 2015), with a key role of solar 0%
2015 2022 2030 2050

 TFC will reduce by 42% in Italy by 2050 w.r.t. 2015, mainly in Building Industry Transport

transport and building sectors. 80% of the TFC reduction is Electricity role in TFC reduction by sector
due to electrification 5000

 Building could become the most electrified sector (from 15% 4000
80% due to
to 53% from 2015 to 2050), industry is already highly electrified 3000 electrification

PJ
and can capture marginal further potential (from 39% to 42%), 2000

transport has the largest growth (from 3% to 41%) 1000

0
 Electrification will reduce the energy dependency, lowering 2015 2050

the share of imported fossil fuels in the primary energy supply Transport
Industry
by 33% in 2050 Building
Total Final Consumption (TFC)
* Increase
E. of average efficiencies
F.Bompard of other technologies
– E-Transition, and shifts
Sustainability to other
and commodities
Economics- 56
 ENVIRONMENTAL IMPACTS
Total sectors CO2 emissions reduction*
350 311 -68%
 Penetration of electricity (from RES) in final energy 300 281

uses will lead to a significant reduction (-68%) of CO2 250 217

emissions by 2050, helping the transition towards 200

Mt
carbon neutrality 150
100
100
 Electrification will contribute by 85% to the CO2 50
emissions reduction 0
2015 2022 2030 2050
 PM and NOx emissions will reduce by 76% and 69% * Reduction of total emissions of studied sectors (residential, industry, transport)

respectively over the period 2015-2050. For PM, the PM reduction

highest reduction will occur in the residential sector, 120
due to the shift from fossil and biomass to electric 100
technologies. For NOx, the highest reduction is 80

achievable in the transport sector 60

kt
40
 Electrification will contribute to the air pollutants 20

reduction by 52% and 80% for PM and NOx 0

2015 2050
respectively PM Building PM Industry PM Transport
Delta PM Building Delta PM Industry Delta PM Transport

E. F.Bompard – E-Transition, Sustainability and Economics- 57

 ECONOMIC IMPACTS
Variation of carbon intensity in different years
0,20

Carbon intensity of GDP

0,18
0,16
0,14

[ktCO2/G€]
 The amount of energy requested for 0,12
0,10
generating a unit of GDP (energy intensity) 0,08
0,06
will reduce by 71% in 2050 w.r.t. 2015, thanks 0,04

to the reduction of energy consumption 0,02

0,00
2015 2022 2030 2050

 Similarly, the carbon intensity will reduce by Carbon intensity Reduction due to electrification Reduction due to other factors*

83% in 2050 w.r.t. 2015 * Increase of average efficiencies of other technologies and shifts to other commodities

CO2 emissions and GDP evolution

 Electrification will contribute by ~90% to the 140 3,5

overall carbon intensity variation in 2050 120 3

CO2 emissions (Mt/y)

100 2,5
 These trends strengthen the decoupling

GDP [Billion €]
80 2
between economic growth and CO2 emissions
 possibility of ensuring at the same time 60 1,5

economic development and environmental 40 1

sustainability 20 0,5

0 0
2015 2020 2025 2030 2035 2040 2045 2050
Year
Industry Building Transport Power generation sector GDP
E. F.Bompard – E-Transition, Sustainability and Economics- 58
 SOCIAL IMPACTS
Cumulated health (healthcare, productivity, life saving) cost saving
900
800
 The air pollutant emissions reduction due to 700

electrification will reduce by 796 Billion € in 600

Billion €
500
2050 the cumulative total cost (healthcare, 400
productivity and human lives) associated to 300
200
pollution 100
0
 Electrification will contribute by 87% the total 2022 2030 2050
costs reduction Savings due to electrification Savings due to other factors *
* Increase of average efficiencies of other technologies and shifts to other commodities
 Building sector will contribute by 75% to the
total costs reduction, due to the decrease of Reduction of households' energy expenditures w.r.t income
2022 2030 2050
biomass technologies 0%
-6,2%
-4,1% -15,8%
 Electrification will enhance the affordability -10%
-2,0% -36,1%
for families, reducing the share of the income -20%

related to energy expenditures by 36.1% in -30%

2050 -40%
-2,6%

-50%
Reduction due to electrification Reduction due to other factors*
E. F.Bompard
*commodity – E-Transition,
shift among fossils Sustainability and Economics- 59
 COMPARISON WITH REFERENCE SCENARIOS 

KPIs (2050)
Final energy consumption
reduction
1
0,9
0,8
0,7 Total primary energy supply
CO2 emission reduction
0,6 reduction
The ITELC2050 scenario has been compared with 0,5

other national and international scenarios 0,4

0,3
available in literature, showing a general 0,2

coherence with their forecasts w.r.t. the 0,1

0
considered KPIs. The optimistic value for RES
penetration in the power mix Renewable share in electricity
production
Energy intensity

(85.6%) results in a high reduction of total

primary energy supply (-45% w.r.t. 2015) for the
ITELEC2050 scenario. This reduction, coupled
with the assumed GDP growth, leads to a
Per capita final energy Final energy consumption
decrease in the national final energy intensity of consumption reduction intensity reduction

about 71%
Reference Scenarios ITELEC2050

E. F.Bompard – E-Transition, Sustainability and Economics- 60

ELECTRIFY ITALY AT A GLANCE

E. F.Bompard – E-Transition, Sustainability and Economics- 61