THE ITALIAN ENERGY STRATEGY AND BEYOND

CROATIAN ENERGY ASSOCIATION 23rd FORUM Zagreb 28th November 2014

Stefano MottarelliPublic and EU Affairs

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Edison key figures

50,4 Bcm Hydrocarbons Reserves

111 Mineral Leases (gas and oil)

3 Gas Storage Centers

1 LNG Terminal (total capacity 8 bcm/y, Edison 6.4 bcm/y)

1HV Merchant Line (150 MW)

3 Pipeline projects

7,7 GW Installed Capacity

22 Thermoelectric Power Plants

47 Hydroelectic Power Plants

32 Wind Farms

9 Photovoltaic Systems

1 Biomass System

3

Edison interest in Croatian power projects

Edison is already present in Croatia in Exploration & Production business

As of Power business, Edison has participated to a tender launched by the Croatian electricity

company HEP for Plomin C

Plomin C project- Coal fired power plant 500 MW to be built as third unit of Plomin PP- JV: 50% HEP – 50% strategic investor- A 20 years PPA on 50% of the capacity to be purchased by HEP- Edison has been pre-selected as a potential investor- By end of August 2014 Edison submitted its proposal

- Edison did not receive the highest score but in case HEP determines that it is not possible to reach

an agreement with the first-ranked Bidder, HEP may contact the next highest ranked Bidder to

discuss next steps

Edison is interested in potential investments in Croatia with HEP especially in Hydro PP projects

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Italy energy strategy so far: the beginning in the 19th century

Giuseppe Colombo

EDISON

1883First thermoelectrical power plant in Europe

Growth

1883 – Coal power plant in the center of Milan, Santa Redegonda

- ENERGY STRATEGY-

MANAGED BY PRIVATE COMPANIES AND LOCAL

UTILITIES

Goal

5

Giuseppe Colombo

EDISON 1945

Growth

Competitiveness

- ENERGY STRATEGY-

AGIP HYDROCARBONS

GOALS

Italy energy strategy so far: after the second world war

1883First

thermoelectrical power plant in

Europe

Growth

Enrico Mattei

AZIENDA GENERALE ITALIANA PETROLI

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Enrico Mattei

AZIENDA GENERALE ITALIANA PETROLI

Growth

Competitiveness

Security of Supply

- ENERGY STRATEGY-

NUCLEAR

*Foreseen demand: 420520 TWh @ 1990; nuclear: 20 GW @1985 ; 4662 GW @1990.

Giuseppe Colombo

EDISON 1945

Growth

Competitiveness

1883First

thermoelectrical power plant in

Europe

Growth

GOALS

1975

Italy energy strategy so far: ENEL and the oil crisis in the 70s

First national energy plan*1962

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First national energy plan*

- ENERGY STRATEGY -

RENEWABLES AND COGENERATION

Last national energy plan

1988

Enrico Mattei

AZIENDA GENERALE ITALIANA PETROLI

Growth

Competitiveness

Security of Supply

Giuseppe Colombo

EDISON 1945

GrowthCompetitivity

1883First

thermoelectrical power plant in

Europe

Growth

1975

Italy energy strategy so far: local environmental awareness in the 80s

1962

Growth

Competitiveness

Security of Supply

Environment

GOALS

1987Referendum

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Growth

Competitiveness

Security of Supply

Environment (local impacts)

- ENERGY STRATEGY-

LIBERALISATION AND «LOW CARBON»

Kyoto Protocol signature

1997

Italy energy strategy so far: the Kyoto protocol and the «green globalisation»

Last national energy plan

1988

Enrico Mattei

AZIENDA GENERALE ITALIANA PETROLI

Growth

Competitiveness

Security of Supply

Giuseppe Colombo

EDISON 1945

GrowthCompetitiveness

1883First

thermoelectrical power plant in

Europe

Growth

1975

Growth

Competitiveness

Security of Supply

Environment (local and global

impacts)

GOALS

1962First national energy plan*

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AT INTERNATIONAL AND EUROPEAN LEVEL:

International and Italian policy framework in the last 15 years

EU Commision RES Directive

EU ETS Directive

New RES & EU ETS Directive

Energy Efficiency Directive

New 2030 targets ?

Kyoto Protocol signature

1997 2001 2003 2009 2012 2014

AT ITALIAN LEVEL: lack of a long term strategy.

Nuclear “ Renaissance ” (2008)

“Sblocca centrali” (2002)

~30 GW di CCGT in 10 years*

Green Certificates and “ Conto Energia ” (2003 e 2005)

~30 GW RES in 10 years

Gas “ Hub ” (2008)

Import: 100 Bcm (pipeline ad LNG)

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The National Energy Strategy

National

Energy

Strategy

2013

Growth

Competitivity

Security of supply

Environment

Growth

Competitiveness

Security of Supply

Environment (local impacts)

Kyoto Protocol signature

1997

Last national energy plan

1988

Enrico Mattei

AZIENDA GENERALE ITALIANA PETROLI

Growth

Competitiveness

Security of Supply

Giuseppe Colombo

EDISON 1945

GrowthCompetitiveness

1883First

thermoelectrical power plant in

Europe

Growth

1975

Growth

Competitiveness

Security of Supply

Environment (local and global

impacts)

GOALS

1962First national energy plan*

2011Referendum

1. Growth: enhance sustainable growth through energy sector development

Investments in CCGT from 2000

30 Billion €

Investments in RES from 2000

90 Billion €

Expected investments until 2020

RES

Traditional gas and electricty sector

Enegy Efficiency

Total

Green and white economy: 130 Billion €, almost 70% of expected investments

National Energy Strategy goals (1/4)

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National Energy Strategy goals (2/4)

1. Growth: enhance sustainable growth through energy sector development

2. Competitiveness: to bring down energy price gap compared with other european countries

France Germany Spain Scandinavian countries

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Electricity prices in Europe

Italy PSV Dutch TTF Zeebrugge UK NPB

Italy

Gas prices in Europe

1. Growth: enhance sustainable growth through energy sector development

2. Competitiveness: to bring down energy price gap compared with other european countries

3. Security of supply: increase security of supplies and reduce import

Present gas import dependency

~90%

Minimum and maximum delivery from storage during winter

Total supply

Peak demand

Production Import Storage

Gas system fragility at peak times (MMcm/d)

National Energy Strategy goals (3/4)

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2010 20200

50

100

150

200

250

300

350

400

ImportProduction

Expected electricity demand (TWh)

346

46

34521

Present electricity import dependency

~13%

1. Growth: enhance sustainable growth through energy sector development

2. Competitiveness: to bring down energy price gap compared with other european countries

3. Security of supply: increase security of supplies and reduce import

4. Environment: achieve and go beyond «20-20-20» targets and have an active and leading role in 2050

Roadmap definition and enforcement

GHG reduction- Mton CO2/year -

RES development- % on final consumption-

Energy Efficiency- Mtep primary demand-

-18% vs. 2005 17% -20% vs. BAU@2020

«20-20-20» GOALS

National Energy Strategy goals (4/4)

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(-15% in 2011)* (11,5% in 2011)**

* Source MiSE

** Source Eurostat

Note: the target for ETS sectors is 21% reduction below 2005 level and Italy has already achieve 20% (verified emissions 2012)

The priorities of the National Energy Strategy

1. Energy efficiency enhancement, beyond European 2020 targets

2. Improvement of a liquid, competitive and integrated gas market, in order to be the main gas hub in South Europe

3. Renewables sources development, beyond 2020 targets

4. Improvement of liberalised, competitive and integrated electricity market, in terms of infrastructures and regulation, with a complete market integration of renewables

5. Refining sector and fuels distribution grid reorganization

6. Sustainable production of national hydrocarbons

7. Governance enhancement

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CCGTs

Renewables

Gas infrastructures

E&P

LNG

Storages

Edison and the National Energy Strategy

Beyond the Energy Strategy

The Italian Presidency of the Council of the European Union will devote its efforts to four major, closely interlinked pillars of EU energy policy:

1. Framework for climate and energy beyond 2020

• Italy will favour a constant, active involvement of the EU Council

2. EU energy security

• Italy will promote a thorough debate on the proposed EU Energy Security Strategy

3. Completion of the single energy market

• Italy will promote the rapid adoption of network codes, market coupling and will ensure an early debate on Commission’s Communication on the retail market

4. External energy policy

• Italy will focus attention on Euro-Mediterranean relations and on the safety of offshore hydrocarbon prospection, exploration and production activities

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CROATIAN ENERGY ASSOCIATION 23rd FORUM Zagreb 28th November 2014

Grazie!