Electrify 2030: new research on electrification in Italy

Cernobbio, 7th to 9th September 2018

Greenhouse gas emissions at the global level have increased constantly, reaching 58,710 million tons of CO2 in 2016, an increase of 62% compared with 1990 levels. The world needs to accelerate the decarbonisation process and electricity is part of the solution. 

As the generation of electricity becomes cleaner, the electrification of sectors of the economy that historically have been associated with higher emissions is one alternative we ought to pursue. Recent literature has outlined that when CO2 emissions from electricity generation in one country are below 600t/GWh then increasing the share of electricity on final energy consumption is environmentally convenient. Both the European Union as well as Italy are already below this threshold, thus facing a concrete opportunity to decarbonize further by increasing electrification of their economies. 

The study “Electrify 2030” offers a new perspective on the key role of the electricity vector in the energy transition process, looking at the impact electrification could have in Italy, as an opportunity to unleash new investments,  create new jobs  enabling sustainable and resilient development of  the Country. Produced by think tank The European House - Ambrosetti with the scientific collaboration of Enel Foundation, the study benefited from the technical support of  Enel X experts, the Enel Group division dedicated to developing innovative products and digital solutions. 

The study was recently presented at the Cernobbio Forum, organized by The European House – Ambrosetti, in a special session with the participation of Valerio De Molli, Chief Executive Officer of The European House - Ambrosetti, Raffaele Tiscar and Francesco Profumo, members of the study’s scientific committee, Francesco Starace, Chief Executive Officer of Enel and President of Enel Foundation, Francesco Venturini, Head of Enel X, and Fatih Birol, Executive Director of the International Energy Agency.  Patrizia Grieco, Chairman of Enel and President of Enel Foundation’s Scientific Committee also attended the conference.

Ten key points of the research

1. Decarbonization and resilience of economic systems are crucial features in reducing the overall human development footprint. Indeed, the need to decarbonize economic systems is going together with the necessity to address external shocks by exploiting a country’s resilience, meaning the capacity to bounce back quickly after a negative event.
   
2. Five reasons underpin the claim of the electricity carrier being the energy carrier of the future. Those include electricity’s contribution to reduce CO2 emissions and air quality when generated through a balanced energy mix; its ability to improve the resilience of the overall energy system; its impact in promoting higher levels of energy efficiency; the potential for its integration with digitalization, thus enhancing the role of the Distribution System Operator (DSO); and its push towards innovation and sustainability in lifestyles and industrial processes. 
3. Electrification has been growing in recent decades and several policy scenarios foresee continued growth to 2030. Italy’s current level of electrification, expressed as a percentage of total energy consumption met by electricity, is equal to 21%, and the research identified the potential to grow this indicator to between 24% and 30% by 2030. In order to reach this potential, three end-user sectors demonstrate the greatest electrification potential: transport, buildings and the industrial sector.
4. e-Mobility in Italy is still in the take-off phase but the electrification of mobility is expanding.  Being transport the sector with the highest electrification potential in Italy to the year 2030, a comprehensive e-Mobility database has been developed to support this study.
5. The e-Mobility value chain involves multiple industrial and service supply chains, with significant potential in terms of turnover, employment and installed competences. The extended e-Mobility supply chain has been reconstructed, considering both direct and associated chains: Research & Development, manufacturing, distribution and sales of vehicles, IT and energy platforms, use and aftermarket, “second life” and reuse of electric vehicle and charging infrastructure components. The joint analysis of all components reveals that, in Italy, there are about 160,000 companies potentially involved with more than 820,000 employees and a potential associated turnover of more than €420 billion.
6. Evolutive scenarios to 2030 were developed for all forms of e-Mobility. In order to estimate the achievable turnover in Italy along the extended e-Mobility industrial value chain by 2030, three alternative scenarios (baseline, intermediate and accelerated) have been developed for the penetration of all forms of mobility and charging infrastructures. The total potential turnover in Italy at 2030 deriving from the penetration scenarios for vehicles and charging infrascruture, associated ICT services and recycling activities, is estimated to be between €102.4 and €456.6 billion. The penetration scenarios considered include the following ranges: 
   • e-Cars: 2 to 9 million vehicles and 30,000 to 45,000 dedicated public charging stations
   • e-Twowheelers: 240,000 to 1.6 million units and 857 to 2,000 dedicated public charging stations; 
   • e –Buses: 3,307 to 10,188 vehicles and 413 to 637 dedicated charging points; 
   • e-LightCommercial Vehicles: 202,763 to 630,478 vehicles and 724 to 1,051 dedicated public charging stations; 
   • e-Trucks: 0 to 34,336 vehicles and 0 to 8,584 dedicated charging points
7. Electrification technologies have the potential to activate an extended industrial value chain in Italy. A 360° mapping of electrification technologies reveals more than 60 technologies, supporting direct and indirect electrification. The overall Italian industrial value chain of electrification technologies is potentially composed of about 17,000 companies involving more than 320,000 employees and with a total turnover of around €80 billion.
   
8. Six electrification technologies were identified as having the highest deployment potential and providing the largest efficiency gains: heat pumps, LED lamps, electrochemical storage systems, electric drive, power electronics, and energy management systems.
9. A “what if” analysis has been developed for the electrification technologies deployment scenario. Considering only four technologies with end user impact (heat pumps, LED lamps, electric drive and electrochemical storage systems), the overall amount of turnover that can be originated from them ranges between €135 billion and €326.5 billion.
10. Integrated strategic action is needed to sustain the electrification process and reap all its benefits. The research offers different proposals for a multi-level strategy in 5 focus areas including: the uptake of e-mobility, the deployment of energy efficiency, the enhanced collaboration between companies and research networks, the strengthening of capabilities on electric frontier technologies and the increased awareness about the benefits of electrification.