05 July 2022 - Stakeholder national workshops

Challenges and progress towards SDG7 in Italy, in the light of today’s energy crisis - a Stakeholder Workshop in Venice

PARIS REINFORCE held a stakeholder workshop in Venice, Italy, on July 5, 2022, at the premises of the Ca’ Foscari University. The aim of the stakeholder workshop was to elicit experts’ tacit knowledge, views, and perceptions of Italy’s challenges and opportunities emerging from the current energy crisis towards net-zero and progress in SDG7 (including energy affordability, decarbonisation, and reliability). The event was also livestreamed to allow as large and diversified an audience as possible, considering also COVID-imposed difficulties to join in-person. Apart from partners NTUA, CMCC, Bruegel, E4SMA, and HOLISTIC, participants from 12 institutes physically joined the workshop, including universities (Ca’ Foscari University, University of Brescia, and University of Padova), research institutes (Enel Foundation, European University Institute, Ricerca sul Sistema Energetico/RSE, Fondazione Eni Enrico Mattei/FEEM, and European Institute on Economics and the Environment/EIEE), one association (Italian Alliance for Sustainable Development/ASviS), one industry (Enel), and one energy poverty NGO (Banco dell’energia Onlus).

At the beginning of the event, Project Coordinator Assoc. Prof. Haris Doukas (NTUA) and event host Dr. Lorenza Campagnolo (CMCC) introduced the scope and objectives of the workshop; this was followed by a short introduction to the PARIS REINFORCE project by Dr. Alexandros Nikas (NTUA).

During the first session of the workshop, experts discussed the interplay between climate change mitigation and broader sustainable development from both an Italian and an EU perspective. This was kicked off by a presentation from ASviS on the current trends and progress of the country across all SDGs. Dr. Lorenza Campagnolo (CMCC) then offered a forward-looking study of climate policy implications for EU progress in several SDGs followed, based on the project’s recent co-created integrated assessment modelling work. Experts highlighted hurdles and delays, including poverty on the rise, agriculture-related pollution despite recent progress in the sector, limited progress in diffusion of renewables towards doubling their share in final energy consumption by 2030, and significant ground to cover in terms of unemployment and net income equality. Experts also dove into specific aspects, for example the role of overfishing in SDG14 (life below water). Apart from some positive signs in SDGs 7 (clean, reliable, and affordable energy), 13 (climate action), and 16 (peace, justice, and strong institutions) as well as relative stability in SDGs 2 (hunger elimination), 6 (clean water and sanitation), and 9 (innovation)—experts suggested that Italy has been displaying negative trends across the remainder of the sustainability spectrum. This was deemed to be notably the case for social and human development SDGs (including poverty, equalities, growth and employment, etc.). Other important insights stemming from this session include the need to holistically address the SDG spectrum, the lack of will from political agencies to implement existing measures, the limited national stakeholder ownership of EU-level decisions, and the need to restructure schemes to support energy efficiency such as the Ecobonus, whose budget has run dry.

The second session offered a deep dive into the role of key energy technologies, kicking off with a presentation by Dr. Alessandro Chiodi (E4SMA) focusing on the various shades (green, blue, grey) of hydrogen and the big question mark for CCS, as well as their rollout in sectors other than power generation. The second presentation from RSE delved into the national energy scenarios currently developed by the Italian government, with a focus on renewables, energy efficiency, and greenhouse gas emissions, as well as a technological discussion of the role of natural gas. The latter was primarily targeted as part of the broader discussion on Italy’s near- and longer-term fossil fuel dependence. In the subsequent discussion, experts noted that the ‘Fit for 55’ package—when implemented— and the more concrete strategies stemming from REPowerEU are deemed to highly contribute to reducing reliance on Russian fossil fuel imports. However, RES expansion must really ramp up, with the necessary growth rate being questioned as unrealistic. One expressed concern was the exclusion of behavioural changes and circularity performance from the core national energy scenarios. Although all presentations highlighted the use of CCS, expectedly taking off post-2030 and making a big chunk of emissions cuts in 2050, it was stressed that Italian policymakers may not be enthusiastic over this technology (especially blue hydrogen, coming from natural gas with CCS). Although heavy LNG investments were widely seen as an unfavourable route, stakeholders also agreed on the need for diversification of fossil gas imports as a total gas phase-out until 2050 was contested. There was also consensus on the potential of small-scale (rooftop) solar installations, and the big role offshore wind can play in energy-system decarbonisation. Finally, nuclear was disregarded as a possible option for the Italian context, and experts saw possible trade-offs emerging among security of supply and emissions reductions, at least in the near-term.

In the third session, the workshop focus shifted from technological and security of supply aspects of the energy transition towards the affordability component of SDG7. The session started with a presentation on energy poverty from the Italian Observatory on Energy Poverty (OIPE), which offered various definitions and criteria for energy poverty (expenditure-based observations or theoretical modelling, self-reported assessments, or direct measurements from smart meters) that Member States are flexible to establish and use when reporting to the European Commission. In Italy, in particular, an alternative Low-Income, High-Cost approach was recently used in the INECP, accounting for household income, housing conditions, energy tariffs, behaviours, and special needs. Stakeholders highlighted that Italy has several contrasting policies, including discounts on energy bills per household income/wealth and other subsidies for tax exemptions and regional heating fuel price discounts, which are not well-targeted to address affordability issues. Insufficiently targeting energy-poor households, coupled with the bold tax exemptions stemming from existing policies, has recently led to considerable losses in public revenue flows. Another paradox discussed in the session was the performance of regulated prices after the beginning of the Ukraine conflict and in the light of the sharp energy prices shocks. Stakeholders observed that, in the first half of 2022 that was overshadowed by Russia’s invasion of Ukraine and the energy price-related implications of associated policy responses and developments, bold electricity demand cuts among households were inadequate to counterbalance the price shocks, which anyway led to considerably costlier utility bills. The session concluded that there is considerable need to rethink how to define and measure energy poverty, as well as to avoid rolling out contrasting policies and to better target redistributive effects, citizen behaviours, policy integration, and fiscal viability. Energy poverty was also approached from a macroeconomic perspective (financial system sustainability and broader economic independence, as well as caps on global-level financial speculations on energy and material supply), before notably linking affordability to the supply side. For example, the pressing need to invest in interconnections and concretely defining the role of hydrogen was emphasised to address energy price volatility both in the near-term and in the longer run; moreover, large reforms to the electricity market were not seen favourably, while experts also discussed the challenges for the upcoming winter, when scarcities in the European supply system may result in uneven races for fossil fuel imports and require activating as many system flexibilities possible, including readily available fossil-fuel levers that could force Europe to backslide on its climate pledges and progress.

In the final session of the workshop, and considering all presentations and points raised, stakeholders participated in a fuzzy cognitive mapping exercise, via a Google survey (link). To facilitate participants without access to a mobile phone or computer at the time, the questionnaire was also handed out as a printed table.

Consortium presentations are available below:

Introduction to PARIS REINFORCE - Alexandros Nikas & Haris Doukas (NTUA)

ASviS SDG report 2021 (ASviS)

PARIS REINFORCE study on EU climate policy and SDGs - Lorenza Campagnolo (CMCC)

EU and Italian technological perspectives towards SDG7 - Alessandro Chiodi (E4SMA)

Policy support and scenario planning for Italy (RSE)

Energy poverty (OIPE)

FCM exercise - Alexandros Nikas (NTUA) & Georgios Xexakis (HOLISTIC)