Importation and Generation

Electricity can mainly be procured in two ways:

  • through the purchase of the energy produced by others;
  • through generation.

Production is currently deregulated, and the price is set based on bilateral contracting or through the electricity exchange.

The main systems for producing electricity are:

  • Thermoelectric plants, in which energy is unleashed as a result of the combustion of oil, coal, gas or other fuels;
  • Nuclear plants, which are based on fission of an atom through bombarding its nucleus with elementary particles;
  • Geothermal plants, in which energy is produced by exploiting the heat of the subsoil;
  • Hydroelectric plants, which use the force of water to activate turbines that, in turn, generate electricity.

In some cases, these plants can be integrated.  For example, a co-generation plant is one in which combustion is used for production of heat and electricity.

In recent decades, the production of energy has increasingly relied on renewable sources, with exploitation of the force of water (hydroelectric), wind (eolic), sunlight (thermal solar and photovoltaic solar), biomass materials, and urban waste.

Transmission

Once produced, electricity needs to be transported to the distribution network for connection to final users. Distribution may entail transport over hundreds of kilometres, and therefore, in order to prevent excess loss of energy along the network, the electrical current is transmitted at high or very high tension, with values between 120kV and 380kV compared with the initial level of 30kV.

The transmission activity is managed under concession, by the national transmission network manager, Terna, which also handles dispatch activity. The tariff for remuneration of the service is set by the AEEGSI.

Dispatch

Since electricity is a commodity that cannot easily be warehoused, a system has been set up to guarantee the efficiency and coordination of the production, transmission, and distribution activities, so that the energy made available by plants continuously matches the energy drawn by users. The dispatch activity is managed by the company, Terna.

Distribution

The distribution network regards the final end of the production-and-distribution chain, and represents the point of the user’s access to the electricity network. The transport occurs through distribution networks made up of aerial or underground power lines. The electricity travels along high- (60kV -150 kV) medium- (5Kv-25kV) and low-tension (less than 1kV) networks. For most users, the electricity drawn is converted into low- and medium-voltage energy.  Certain large industries are the only users who need to consume huge quantities of energy, and they are connected directly to the network.

Distribution and transformation of electricity are done through primary stations that lower high voltage to medium voltage, and secondary stations, that lower medium voltage to low voltage.

The distribution service is priced according to standard national tariffs set by the AEEGSI for four-year periods.

Sale

Electricity acquired from producers or imported energy is marketed and sold to final customers.  The sale activity is deregulated, and therefore, customers who meet a certain consumption threshold may choose their supplier and access the unrestricted market, while other customers are supplied through Protected Categories Service or the Safeguarded Service (companies powered with medium-tension energy, or companies with revenues of less than €10 million and/or less than 50 employees) by operators who invoice the final customers for energy sourced from the company, Acquirente Unico S.p.A. (Protected Categories Service), or from the companies having been adjudicated tenders (Safeguarded Service). The sale prices on the unrestricted market are defined based on contracting between the seller and the final customer, whereas prices for customers supplied through Protected Categories Service are governed by the AEEGSI, and the prices for customers supplied through the Safeguarded Service are set on a regional basis through tenders.

Control and regulation

The electricity market is controlled and regulated by the AEEGSI, which oversees and governs the activities of the operators on the market.